Singapore-based Funding Societies | Modalku (Funding Societies), the largest unified digital finance platform for micro, small, and medium enterprises (MSMEs) in Southeast Asia, signed the third credit facility* with HSBC under its ASEAN Growth Fund.
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The overall transaction, an accumulative commitment of over US$100 million that also includes the two annual credit facilities extended to funding societies, reaffirms HSBC’s continued support for MSMEs through the platform since 2022.
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This transaction, which is among HSBC’s largest asset-backed secured facilities extended to digital SME lenders in Southeast Asia, will further deepen and extend Funding Societies’ reach to providing credit access to underserved MSME segments in the region.
While the Asia-Pacific (APAC) region has expanded its middle class and made significant progress in terms of increasing access to formal banking services and digitalizing its commercial environment, the area still faces a credit access gap of US$2.5 trillion, accounting for more than half of the global shortfall in small business financing. To put things into perspective, up to 99.9% of businesses are MSMEs, accounting for 35% to 69% of each country’s GDP.
As part of its ASEAN Growth Fund strategy, this transaction underlines a scalable solution to allow and enable digital lenders like Funding Societies to raise additional equity capital and debt financing through different channels. Furthermore, HSBC will act as the structuring bank, lender, account bank, FX counterparty, facility, and security agent in providing a scalable and pan-regional financing solution to support Funding societies’ business expansion in the region.
In March 2024, HSBC established the US$1 billion HSBC ASEAN Growth Fund to assist Singapore-based digital platform enterprises that support e-commerce in the region in achieving economies of scale across numerous international markets, building their asset portfolios, and progressing through the corporate lifecycle. HSBC Singapore, together with the New Economy and Venture Debt Fund, provides a comprehensive suite of financing alternatives for new economy enterprises at all stages of growth.
Co-founder and Group CEO of Funding Societies, Kelvin Teo, said, “The continued support from a global bank such as HSBC is a testament to its commitment to support the development of digital platform businesses such as ours and MSMEs as we ride through two-decade high interest rates impacting the global economy. This enables us to further explore scalable debt financing for growth and profitability and bolster financial inclusion for the underbanked and underserved SMEs in the region.”
Harish Venkatesan, Head of Corporates and Business Banking, HSBC Singapore, said, “As an early-starter and a leading MSME digital financing player in ASEAN, we are pleased to provide our third credit facility for Funding Societies, cumulatively more than US$100 million. This will enable us to continue supporting its efforts to provide financing support to micro, small, and medium enterprises, which will contribute to the building blocks of societies in the ASEAN region. We look forward to continuing support for Funding Societies as they grow their businesses and for the underlying MSMEs in the region through the HSBC ASEAN Growth Fund.”
About Funding Societies
Funding Societies | Modalku is the pioneer of SME Digital Financing Platforms and Debt Investment Platforms in Southeast Asia. We accelerate business growth by fast financing, which is crowdfunded by retail and institutional investors as well as high-net-worth individuals.
Founded in 2015 in Singapore, Funding Societies | Modalku is currently licensed and operating in Singapore, Indonesia, Malaysia, and Thailand. We have also achieved global accolades for its work on financial inclusion to make financing accessible to SMEs in Southeast Asia, which includes the MAS FinTech Award, the Global SME Excellence Award from the United Nations, and the prestigious global Fintech100 by KPMG and H2 Ventures.
Funding Societies | Modalku is dedicated to the vision of funding underserved SMEs and making a positive impact in society. We exist to enable fair financial access to Southeast Asia.
