Nearly 70% of small medium enterprises (SMEs) in Southeast Asia rely on savings, family and friends to raise their start-up capital, according to findings in a recent SME industry report.
The report, published by Funding Societies, also found that the rest raised their seed money from traditional banks (23%) and alternative sources such as fintech companies (7%).
Funding Societies Malaysia country head Chai Kien Poon said access to financing remains a critical concern for Malaysian MSMEs.
“The findings underscores the need for innovative financial solutions tailored to the specific needs of Malaysian MSMEs,” he said in a statement.
Chai said Southeast Asia’s economy is on the road to recovery post pandemic and despite recent macroeconomic headwinds, the region is still less impacted in comparison to other parts of the world.
“The report reinforces the importance of fintech platforms like Funding Societies in bridging this gap and providing MSMEs with the necessary financial support to grow and thrive,” he added.
He added the report also highlights the need for a solution to improve cash flow management for SMEs.
“Most SMEs surveyed were more concerned about payables, particularly their capacity to pay suppliers and more than a third said access to financing and fulfilling payments as their top payable issues.”
Other concerns include payables monitoring and reporting, getting approval for payments and matching invoices against purchase orders and receipts.
The report aimed to look into the behaviours and challenges SMEs are facing and how using digital financing and payments can capture business opportunities and efficiencies.
Nearly 1,000 SMEs in Malaysia, Singapore, Indonesia, Thailand and Vietnam surveyed for the report entitled “SME Digital Finance and Payments Behaviours: Southeast Asia Report 2023”.
The report comprises respondents under the SME category, including micro (74%) and are business owners themselves (63%) – surveying both customers of Funding Societies (59%) as well as non-customers (41%).
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