Funding Societies Partners with HSBC to Boost MSME Financing in Southeast Asia

In recent years, the financial landscape for micro, small, and medium enterprises (MSMEs) in Southeast Asia has been evolving rapidly. Despite the region's growth and increasing access to formal banking services, a significant credit access gap of approximately US$2.5 trillion remains. This gap represents over half of the global shortfall in small business financing, highlighting the urgent need for innovative financial solutions tailored to the unique needs of MSMEs.

Funding Societies, the largest unified digital finance platform for MSMEs in Southeast Asia, has taken a significant step to address this issue. The company recently announced the signing of its third credit facility with HSBC, part of the bank's ASEAN Growth Fund. This new agreement brings the total commitment from HSBC to over US$100 million since their partnership began in 2022. This substantial financial backing is crucial for Funding Societies as it aims to extend credit access to underserved segments of the MSME market.

Kelvin Teo, the co-founder and Group CEO of Funding Societies, expressed his gratitude for HSBC's ongoing support, stating, "The continued support from a global bank such as HSBC is a testament to its commitment to support the development of digital platform businesses such as ours and MSMEs as we ride through a two-decade high interest rates impacting the global economy." This partnership not only enhances Funding Societies' ability to provide financing but also promotes financial inclusion for the underbanked and underserved SMEs in the region.

HSBC's role in this transaction is multifaceted. The bank will act as the structuring bank, lender, account bank, foreign exchange counterparty, and facility and security agent. This comprehensive approach ensures that Funding Societies can effectively raise additional equity capital and debt financing through various channels, thereby facilitating its business expansion across Southeast Asia.

Harish Venkatesan, Head of Corporates and Business Banking at HSBC Singapore, emphasized the importance of supporting MSMEs, stating, "As an early-starter and a leading MSME digital financing player in ASEAN, we are pleased to provide our third credit facility for Funding Societies, cumulatively in excess of US$100 million. This will enable us to continue supporting its efforts to provide financing support to micro, small and medium enterprises which will contribute to the building blocks of societies in the ASEAN region." This commitment from HSBC underscores the bank's dedication to fostering growth in the MSME sector.

Since its inception in 2015, Funding Societies has disbursed over US$4 billion in business financing, positively impacting more than 100,000 businesses across Singapore, Indonesia, Malaysia, Thailand, and Vietnam. The platform has also processed an annualized gross transaction value of US$1.4 billion since entering the payments sector in late 2022. This impressive track record demonstrates the effectiveness of Funding Societies in bridging the financing gap for MSMEs.

The partnership between Funding Societies and HSBC represents a significant advancement in the quest to provide accessible financing solutions for MSMEs in Southeast Asia. As the region continues to grow and evolve, initiatives like this are essential for ensuring that small businesses can thrive and contribute to the overall economic development. By addressing the credit access gap, these financial institutions are not only supporting individual enterprises but also fostering a more inclusive and robust economic environment for all.