FUNDING Societies, the largest SME digital financing platform in Malaysia and South-East Asia, has expanded its financing offerings for the local micro, small and medium enterprises (MSMEs).

       The syariah-compliant trade financing solutions based on commodity murabahah (tawarruq) is for creditworthy and underserved Malaysian MSMEs seeking to grow their business or expand their working capital as the country reopens its economic sectors and transitions to endemicity.

       Wong Kah Meng, co-founder and CEO of Funding Societies Malaysia in a statement said: “Despite their encouraging business performance, MSMEs have limited access to financing and are underserved for various reasons.“Some of the main factors include low to zero credit track record, lack of assets to pledge, and lack of financial documents for credit assessment. This trend was further exacerbated during the Covid-19.

       “Due to social distancing norms and limitation in meeting customers face to face, it became difficult for traditional financial institutions to provide loans to the small and medium enterprises (SMEs), notwithstanding stricter requirements in certain industries or products due to heightened risk.”

       During the pandemic, he said many enterprising Malaysians have taken to digital platforms and market spaces to start, sustain or even expand their business.

       “This can be seen from the increase in search traffic and number of SMEs the platform has onboarded through digital channels across both digital and offline economies,” Wong added.

       In ensuring compliance with syariah principles, Funding Societies partners with Masryef Advisory, a registered syariah advisory company with the Securities Commission as its syariah adviser.

       “Funding Societies took a great step to also offer syariah-compliant products that benefit both Muslims and non-Muslims investors to invest in its platform,” he said.