Latest news with #FundingSocieties
Business Times
07-07-2025
- Business
- Business Times
Growth of SME financial services hampered by banks' restrictions on data: report
[SINGAPORE] Local banks' restrictions on small and medium-sized enterprises' (SME) access to their customers' financial data are hampering API access and holding back growth in financial services for these companies, according to a report by think tank Fintech Nation. API refers to application programming interface, a protocol that allows for two different software programs to talk and exchange data. Currently, the major banks in Singapore selectively grant API access to certain platforms. Only one SME accounting platform, Xero, has managed to be publicly listed across the three local banks. The restrictions also apply to the Credit Bureau in Singapore, where fintechs are unable to access credit information on their own customers. This makes fintechs such as alternative SME lenders and even corporate secretaries resort to manually processing spreadsheets and pdf documents from their customers rather than pulling the data from the customers' banks. The lack of access could be seen as running counter to the Monetary Authority of Singapore's Financial Services Industry Transformation Map, which aims to create a more efficient financial sector. There have been consequences to these restrictions in API access. At least six alternative SME lenders have exited Singapore, including Invoice Interchange and Capital Match. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Validus' sale of its Singapore SME lending business also underscores the challenges these lenders face in getting access to their own customers' financial information. 'If (API access) exists and it is being given to somebody, then other companies should have fair and equitable access to the API – what happens is the larger company can do a deal at a preferential term, but the smaller one cannot,' said a spokesperson for Fintech Nation. The think tank says that the issue is not one of customer consent. These SME customers have already consented to giving access to their financial data from their banks for onboarding or credit decisions. The report also profiles two case studies in alternative SME lender Funding Societies and corporate secretary Sleek. Both companies project increased operational efficiencies should API access to banks be granted. Funding Societies predicts that getting API access to their customers' financial information from their banks will improve operational efficiency. The lender expects a 60 per cent decrease in time from application to credit decision, a 40 per cent drop in customer abandonment rate and data processing costs per application, and a projected 20 per cent increase in SMEs financed annually. While there is openness from Singapore banks to explore partnerships around API access, there is a disconnect when the rubber hits the road. 'In our experience, actual engagement has been limited due to considerations around security, compliance, commercial priorities, and the evolving nature of industry collaboration,' said Kelvin Teo, CEO and co-founder, Funding Societies. At Sleek, up to 15 minutes per client is spent downloading, formatting and uploading statements to an accounting tool. With 10,000 customers, this adds up to 2,500 hours per month of manual labour and 30,000 hours per year lost to inefficiency. Neobanks and digital banks are eager to provide API access, said Sleek's CEO and co-founder Julien Labruyere. Traditional banks have been reluctant in general, citing the absence of APIs in their tech stack or wanting Sleek to be their exclusive partner, which is difficult as accountants cannot force customers to a specific bank. 'In all our other markets (the United Kingdom and Australia), banks are mandated by law or regulation to provide API access under the Open Banking philosophy, and this is really a game-changer for innovation in general, and for us in particular,' he explained. Raising awareness To be clear, Fintech Nation is not calling for MAS to mandate local banks to open up API access or for local banks to provide access for free. Instead, this report is to raise awareness of the dysfunction within the current system. 'This is where (the) public and private (sectors) can come together to solve that dysfunction,' said the Fintech Nation spokesperson. There are a number of possible models which could solve this issue, such as an API reseller model, in which a company sells access to the API and helps integrate it into different platforms. Another approach would be to approach the issue in terms of industry utility, and leverage MAS' grant supporting projects that build industry-wide utility infrastructure. On the consumer side, SGFindex allows retail customers to see bank and investment balances across all their bank accounts at different banks. While SME customers will require something with more granularity, including daily transactions, SGFindex proves that such projects can be done, and could represent a third possible business model. 'Whichever is the model, this is a dysfunction in the market from that perspective; it is nobody's fault, (and) it would be helpful for the overall ecosystem if it could be addressed,' added the Fintech Nation spokesperson.
Business Times
20-06-2025
- Business
- Business Times
Funding Societies partners VPBank to facilitate SME financing access in Vietnam
[SINGAPORE] Digital finance platform Funding Societies on Friday (Jun 20) entered a commercial agreement of an undisclosed value with Vietnam Prosperity Joint Stock Commercial Bank (VPBank) to help small and medium-sized enterprises (SMEs) access financing from the lender. The partnership aims to address financial gaps for SMEs in Vietnam, which were estimated to stand at US$24 billion or around 2.11 times the current lending level for such businesses as at August 2024, financial data provider FiinGroup indicated. Kelvin Teo, co-founder and group chief executive of Funding Societies, said: 'We bridge the SME financing gap by reaching, assessing and channeling viable SME borrowers with one of Vietnam's most trusted banks.' Through a loan channeling arrangement, Funding Societies will connect potential borrowers to VPBank via its newly launched financing application, SmartSME, to facilitate the process of obtaining financing. The fintech startup will draw on its expertise from prior ventures in countries across South-east Asia – including Singapore, Malaysia and Indonesia – to identify eligible SMEs that are seeking financing and to bring them onboard the SmartSME platform, which was launched on Tuesday. It will screen potential borrowers for eligibility by using its proprietary artificial intelligence-driven credit technology to assess SMEs' loan repayment abilities to mitigate risks, as the SmartSME platform offers unsecured loans. Funding Societies said the collaboration is expected to enhance opportunities for the private sector to access capital resources. This is in line with the Vietnam government's newly issued directive, Resolution 68, that outlines the role of the private sector as a key driver of growth for the nation.
The Sun
13-06-2025
- Business
- The Sun
Funding Societies partners Cedar to mobilise up to RM50m financing to support SMEs
PETALING JAYA: Funding Societies Malaysia, Southeast Asia's largest unified SME digital finance platform, has formalised a strategic partnership with the Centre for Entrepreneur Development and Research (Cedar), the training and capacity-building arm of SME Bank Malaysia Bhd. The collaboration was sealed through a participation agreement with a signing ceremony held recently, outlining a commitment to mobilise up to RM50 million in financing to support credit access for Malaysian SMEs within Cedar's business community. The strategic partnership aims to bridge the challenges faced by SMEs in Malaysia, particularly in obtaining financing, which was estimated at RM290 billion in 2022, according to the Securities Commission Malaysia. The collaboration seeks to deliver accessible and customised financing solutions, which include syariah-compliant payables financing, receivables financing, and term financing, by harnessing digital platforms and alternative credit assessment methodologies. Funding Societies will provide these offerings to eligible entrepreneurs with a targeted focus on vendors supporting government entities, government-linked companies, and multinational corporations. 'We are honoured to partner with Cedar, a long-standing advocate of SME development. This agreement reflects our shared commitment to improve financial access for local businesses. 'By integrating with Cedar's digital platforms and reaching entrepreneurs through nationwide outreach, we hope to make financing more inclusive, fast, and tailored to the evolving needs of SMEs in Malaysia,' Funding Societies Malaysia country head Chai Kien Poon said. Cedar CEO Amirul Imran Ahmat stated that, as the training and capacity-building arm of SME Bank, the agency remains committed to providing support beyond financing to homegrown entrepreneurs throughout their lifecycle. 'With more than 83,000 entrepreneurs trained to date, Cedar is steadfast in its aspiration to be Malaysia's centre of excellence for entrepreneurial development. Our partnership with Funding Societies combines access to capital with SME Bank's digital tools and expertise to support SME growth in a dynamic economy. 'Funding Societies' customers can also leverage our robust digital platforms, particularly ScoreXcess – our financing portal for small and micro enterprises, powered by Cedar. Together, we are committed to accelerating entrepreneurial development and delivering tailored support for MSMEs,' he said. The signing ceremony was officiated by Funding Societies group COO Kah Meng Wong and SME Bank group chief digital and technology officer Hairil Izwar Abd Rahman. Funding Societies and Cedar will co-organise roadshows at the 19 enterprise centres within SME Bank's nationwide network to enhance financial literacy and digital adoption among SMEs in Malaysia. Companies are eligible for financing under this collaboration if they are sole proprietorships, partnerships, limited liability partnerships, private limited companies (not subsidiaries of listed companies), unlisted public companies, or public listed companies and their subsidiaries. Additionally, eligible companies must have at least 30% local shareholding by Malaysians, generate a minimum annual revenue of RM1 million, and have been in operation for at least one year. These flexible financing offerings will be made available through Cedar's digital platforms.
The Star
13-06-2025
- Business
- The Star
Funding societies partners with Cedar to tackle SME financing challenges
Funding Societies group chief executive officer Kah Meng Wong (left) and SME Bank, group chief digital and technology officer Hairil Izwar Abd Rahman. KUALA LUMPUR: Funding Societies Malaysia has signed a participation agreement with SME Bank Malaysia Bhd through the Centre for Entrepreneur Development and Research (CEDAR) to address financing challenges faced by Malaysian small and medium enterprises (SMEs). In a joint statement, Funding Societies said the strategic partnership reflects a commitment to mobilise up to RM50 million in financing to support credit access for Malaysian SMEs within CEDAR's business community. "The collaboration aims to deliver accessible and customised financing solutions, including Shariah-compliant payables financing, receivables financing, and term financing, by harnessing digital platforms and alternative credit assessment methodologies. "Funding Societies will offer these solutions to eligible entrepreneurs, with a targeted focus on vendors supporting government entities, government-linked companies, and multinational corporations,' it said. The signing ceremony was officiated by Funding Societies, group chief executive officer Kah Meng Wong, and SME Bank, group chief digital and technology officer Hairil Izwar Abd Rahman. Funding Societies, Malaysia country head Chai Kien Poon, said the agreement reflects a shared commitment to improving financial access for local businesses. "By integrating with CEDAR's digital platforms and reaching entrepreneurs through nationwide outreach, we hope to make financing more inclusive, fast, and tailored to the evolving needs of SMEs in Malaysia,' he said. Meanwhile, CEDAR, chief executive officer Amirul Imran Ahmat, said that as the training and capacity-building arm of SME Bank, the organisation remains committed to providing beyond-financing support to homegrown entrepreneurs throughout their lifecycle. He said the partnership with Funding Societies combines access to capital with SME Bank's digital tools and expertise to support SME growth in a dynamic economy. "Funding Societies' customers can also leverage our robust digital platforms, particularly ScoreXcess - our financing portal for small and micro enterprises, powered by CEDAR. "Together, we are committed to accelerating entrepreneurial development and delivering tailored support for micro, small, and medium enterprises (MSMEs),' he added. - Bernama
New Straits Times
13-06-2025
- Business
- New Straits Times
SME Bank unit and Funding Societies team up to expand financing access
KUALA LUMPUR: The Centre for Entrepreneur Development and Research (CEDAR), a unit under SME Bank Malaysia Bhd, has partnered with Funding Societies Malaysia in a strategic collaboration aimed at enhancing financing access for local small and medium-sized enterprises (SMEs). Under the collaboration, Funding Societies has committed up to RM50 million in funding. The initiative aims to help address the RM290 billion SME financing gap identified by the Securities Commission Malaysia in 2022, by enabling more inclusive and accessible financing solutions for underserved businesses. The collaboration will focus on providing accessible, Shariah-compliant financing solutions such as payables financing, receivables financing, and term financing by leveraging digital platforms and alternative credit assessment tools. Funding Societies country head Chai Kien Poon said this initiaive described as a long-standing advocate of SME development. "By integrating with CEDAR's digital platforms and reaching entrepreneurs through nationwide outreach, we hope to make financing more inclusive, fast, and tailored to the evolving needs of SMEs in Malaysia," he said in a statement. Meanwhile, CEDAR chief executive officer Amirul Imran Ahmat noted that over 83,000 entrepreneurs have been trained under its programs. The partnership will also include roadshows via 19 enterprise centres across SME Bank's network to enhance financial literacy and promote digital adoption among SMEs. The financing will be made available through CEDAR digital platforms, including ELSA, ScoreXcess, and ODELA.
