Southeast Asian digital finance platform for micro, small and medium enterprises (MSMEs), Funding Societies, has signed its third credit facility with HSBC under its ASEAN Growth Fund.
The overall transaction, an accumulative commitment of over $100million, also includes the two annual credit facilities extended to Funding Societies, reaffirms HSBC’s continued support for MSMEs through the platform since 2022. Furthermore, it is amongst one of the largest asset-backed secured facilities extended to digital SME lenders in Southeast Asia.
The Asia-Pacific (APAC) region has grown its middle class and gained tremendous traction in terms of increasing access to formal banking services and digitalising its commercial environment. Furthermore, the region still has a $2.5trillion credit access gap, making up over half of the global shortfall in small business financing. To put into perspective, up to 99.9 per cent of enterprises are MSMEs contributing to 35 per cent to 69 per cent of each country’s gross domestic product (GDP).
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.”
ASEAN Growth Fund
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.
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 in excess of $100million.
“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 business and for the underlying MSMEs in the region through the HSBC ASEAN Growth Fund.”
The $1billion HSBC ASEAN Growth Fund was launched in March 2024 to enable Singapore- based digital platform businesses supporting e-commerce in the region to achieve economies of scale across multiple international markets, grow their asset portfolios, and advance along the corporate lifecycle. Together with the New Economy and Venture Debt Fund, HSBC Singapore offers a comprehensive suite of financing solutions for new economy businesses across different stages of growth.
Building on success
This announcement comes at the heels of Funding Societies’ most recent strategic investments from Maybank in September.
Since its inception in 2015, Funding Societies has disbursed over US$4 billion in business financing, positively impacting more than 100,000 businesses across Singapore, Indonesia, Malaysia, Thailand, and Vietnam, as well as processed an annualised $1.4billion in payments GTV (gross transaction value) since its entry into payments in late 2022.
The post HSBC Supports Funding Societies With Third Credit Facility to Support APAC Businesses appeared first on The Fintech Times.
