Funding Societies | Modalku today (Nov 2) announced that it has raised US$7.5 million (RM35.8 million) in debt from Norfund, a Development Financial Institution (DFI), which operates an investment fund owned by the Norwegian government for developing countries.
This is the first debt transaction by Norfund with a FinTech SME lender in Southeast Asia.
DFIs have made annual impact investments of US$2 billion (RM9.54 billion) in Southeast Asia between 2017 and 2022 (amounting to over US$12 billion or RM57.2 billion).
Over half of these investments were channeled into the financial services sector, with the majority of the capital deployed through debt instruments. DFIs have the capacity and capabilities to support SMEs where commercial lenders cannot – due to their developmental mission and long term horizon.
This is where Norfund comes in where one of its core areas of investments is to increase financial inclusion where it has contributed about US$4.54 billion (RM21.7 billion) in lending to 7.5 million clients to date. Funding Societies, in its mission to empower SMEs and provide them with greater access to credit, has achieved over US$3.2 billion (RM15.3 billion) in business financing serving about 100,000 SMEs across the region.
Through this debt fundraise, the FinTech lender will be able to channel the funds via its range of tailored financing solutions to the SME segments across all the five markets it operates in.
Co-founder and Group CEO of Funding Societies | Modalku, Kelvin Teo, said, “This milestone is not only a testament to our credit track record through Covid-19 and macro uncertainties, but also a timely opportunity to satisfy the growth capital needs of more underserved SMEs in Southeast Asia. We appreciate Norfund’s support in our mission and commitment to giving a fair opportunity for SMEs.”
Fay Chetnakarnkul, Norfund’s Regional Director (Asia), said, “We have been impressed with how Funding Societies has been able to serve Southeast Asia’s underserved businesses with its broad range of financing solutions and solving cash management challenges faced by these SMEs.”
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