While the country is coming to terms with the implications of the pandemic’s sudden, significant and the unavoidable impact towards the economy, Funding Societies, the largest peer-to-peer (P2), commits to safeguard its clients’ investments.
The platform is adjusting its risk assessment measures, particularly against the backdrop of the current economic uncertainties affecting the under-served SMEs.
In a statement, Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, said the key principle in their decision-making process is to protect their investors from undue risk.
“On this note, and to weather this challenging period for investing, we have taken a multi-pronged approach to ensure that we continue to safeguard our investors’ interests,” Wong said, adding that some measures that they have taken include, but not limited to, assessing the impact of Covid-19 and the ongoing Movement Control Order (MCO) on their SME clients’ repayment capabilities; revising industry focus and implementing shorter financing tenures; reviewing existing SMEs’ exposures and, where justified, reducing concentration risk following reduced business activities; and implementing monitoring and action plans for impacted SMEs.
Following these measures and where warranted, they would align with the impacted SMEs on a reasonable deferment plan.
“Restructuring is another option that we can consider, given there is such a request, and that specific requirements are fulfilled by the SMEs. As a responsible P2P financing platform, we have a delicate balance that we must strike, between safeguarding our investors’ interest and remaining committed to supporting underserved SMEs.”
The reccent survey conducted amongst its investors revealed majority of respondents are supportive of assistance in the form of a deferment plan to help provide cash flow relief to SMEs to sustain their businesses and, in turn, safeguard jobs, particularly in adversely affected sectors.
It will be a win-win proposition as it provides an opportunity for SMEs to recover and consequently continue to make repayments to investors.
“We remain steadfast that all of us (including SMEs and investors alike) will emerge stronger from this blackswan event and we appreciate their trust in us in driving greater access to financing for SMEs not only in Malaysia, but across the region,” Wong concluded.