@ AGROBiz | JANUARY-FEBRUARY . 2024

Funding Societies has been financing the future of agriculture

BY ADELINE ANTHONY ALPHONSO

Funding Societies Malaysia Country Head Chai Kien Poon believes that with the government ’ s intention to promote food security , there is more focus on agriculture these days .

“ We have always been financing agri / agrofood businesses in the mid and downstream . We are trying to do more for businesses in the upstream agri / agrofood businesses ”, said Chai , adding that some banks may not be keen to finance them , as they are younger and smaller businesses with different risk profile .

“ We focus on the smaller enterprises and are able to do so , because our processes are more digital and automated . We leverage on our properietary data model and technology to perform credit assessment , that allows serve the smaller guys at scale .”

On average , SMEs that took financing from Funding Societies experienced a 13 per cent growth in revenue from 2018-2019 .

SUPPORTIVE INVESTORS AND PARTNERS TO SERVE MSMES AT SCALE

Funding Societies has a large variety of investors to ensure that any creditworthy SMEs that come under the platform can get funding .

“ Funding Societies has played a pivotal role in facilitating the transition of SMEs from offline to online operations , offering a suite of digital solutions such as SilkRoad , a proprietary supply chain financing platform , alongside direct debit and digital payment capabilities for payables and receivables management .”

“ Collaborating with partners in regions beyond the Klang Valley , the company extends its reach to serve SMEs in areas like Kelantan and Terengganu while also targeting less digitally-savvy SMEs through referral partnerships , guiding them toward online platforms like Silk Road for easier adaptation .”

Chai also mentioned that Funding Societies has been at the forefront of revolutionising SME digital financing , harnessing the power of cash flow analysis and alternative data through strategic partnerships provides data to predict predict the future financial health of Malaysian SMEs ( MSMEs ), including those in the agricultural and agro-food sectors , thus enabling tailored and seamless financing solutions for them .

Furthermore , Funding Societies ’ expertise in working with institutional lenders , including financial and impact investors , has resulted in the mobilisation of over RM100 million in assets

“ A vegetables wholesaler , that have been with us for over six years . Despite receiving support from banks now , the wholesaler is still with Funding Societes as they see value add in how we compliment the banks ."

– Chai Kien Poon

from domestic financing partners to support Malaysian MSMEs , thus amplifying its social and economic impact on a national scale .

OPPORTUNITY FOR ALL

For the past nine years , Funding Societies has financed businesses across sizes , business vintages and industries .

Chai mentioned examples of several agri / agro businesses that they have financed over the years . An upstream palm oil mill that has seen improved business over the years since they started to finance them .

“ A vegetables wholesaler , that have been with us for over six years . Despite receiving support from banks now , the wholesaler is still with Funding Societes as they see value add in how we compliment the banks .

“ There are also bigger players that we have financed such as fertilisers distributors that have supplied to FELDA and FELCRA and have had over 30 years of experience in the industry ” he said .

FUTURE GOALS

Looking ahead , Funding Societies is committed to expanding its services beyond traditional financing and lending , aiming to provide a comprehensive suite of solutions to meet the diverse needs of SMEs .

This includes a focus on continuous product enhancement to address domestic and cross-border financing needs , alongside strategic investments in or partnerships with simple SME software [ Software-as-a-service ( SaaS )] to address non-financing challenges such as expense management and payments .

Furthermore , the agri / agrofood sector is a key focus area in alignment with governmental priorities on food security and the impact investment agenda under Dana Impak , administered by Khazanah Nasional .

Chai adds : “ The company will intensify collaborations with government agencies such as Halal Development Corp , MDEC ( Agritech ), and corporate partners to extend support to MSMEs within the agri / agrofood sector ”.

The strategic investment by Khazanah Nasional in Funding Societies further underscores the commitment to broadening financing access for MSMEs , reinforcing Funding Societies ’ mission to advance financial inclusion and sustainable economic development in the region . – @ AGROBix