$64.22 M in Islamic financing provided to MSMEs in Malaysia by Funding Societies
Since launching its comprehensive suite of Islamic products in June 2023, Funding Societies, the Singapore-based unified digital finance platform for small and medium sized enterprises (SMEs), has successfully disbursed MYR 300 million ($64.22 million) in Islamic business financing to over 2,500 micro, small, and medium enterprises (MSMEs) in Malaysia.
This milestone—achieved through 8,000 Islamic investment notes—underlines the firm’s commitment to empowering MSMEs, according to a statement released by Funding Societies on Tuesday.
Narrowing the RM290 billion micro-SME (MSME) financing gap identified by PwC for Securities Commission Malaysia requires offering a wide range of Shariah-compliant solutions alongside conventional structures, according to Funding Societies. This is because Malaysia is a global leader in Islamic finance and the Islamic capital markets.
“We are proud of the team for reaching another milestone, surpassing the RM300 million disbursement mark in just one year and providing access to financing for more than 2,500 MSMEs, well ahead of our targets,” said Chai Kien Poon, Country Head, Funding Societies Malaysia.
“This underscores the interest and demand for both Islamic financing and investment products,
“Islamic financing already constitutes 15 percent of our portfolio, and we aim to increase this to 50 percent by 2025,” he added.
Amidst escalating inflation and operational expenses, Funding Societies asserted that small and medium-sized enterprises (SMEs) play a crucial role in Malaysia’s anticipated 4–5% GDP growth in 2024.
It stated that continuous financial assistance is essential to their growth trajectory, promoting the creation of jobs and boosting economic contributions.
According to Dinar Standard, which cited the Global Islamic Fintech Report 2023/24, the Islamic fintech market is expected to grow at a faster rate than the fintech industry as a whole.
It mentioned that due to their strong transaction volumes and promising markets, Malaysia and Indonesia have become centres for Islamic fintech.
According to the State of the Global Islamic Economy Report 2023, which was cited, the halal economy is still growing and was valued at $6.25 trillion in 2022. Malaysia has been at the top of the global rankings for the past few years.
According to the statement, this shows how much potential there is for Malaysian MSMEs operating in the halal sector to use digital Islamic financing solutions to help with their expansion plans.
Funding Societies stated that, despite its continued growth throughout its five major Southeast Asian markets, its primary objective is still to provide underprivileged SMEs with short-term financing options.
