Funding Societies | Modalku, the largest unified small and medium enterprises (SME) digital finance platform in Southeast Asia, has on Thursday announced that it has raised $7.5 million in debt from Norfund, a Development Financial Institution (DFI) which operates an investment fund owned by the Norwegian government for developing countries.
Funding Societies said in a statement that this is the first debt transaction by Norfund with a FinTech SME lender in Southeast Asia.
It is noted that impact investments made by DFIs in Southeast Asia have seen a steady investment of about $ 2 billion annually between 2017 and 2022 (amounting to over $12 billion).
Over half of these investments were channeled into the financial services sector, with the majority of the capital deployed through debt instruments.
This is where Norfund comes in where one of its core areas of investments is to increase financial inclusion where it has contributed about $4.54 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 $3.2 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.
“We’re honored to partner with Norfund, backed by the Norwegian government. 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,” ,” said the Co-Founder and Group Chief Executive Officer of Funding Societies | Modalku, Kelvin Teo.
This debt transaction will serve as a bridge, via Funding Societies, for the funds Norfund manages between the public and private sectors in mobilizing the reach of its investments further into Southeast Asia.
“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,
“We are pleased to be able to support Funding Societies as the company expands its reach and increases financial inclusion further, enabling more businesses to grow and create much-needed jobs in the region,” said Fay Chetnakarnkul, Norfund’s Regional Director (Asia).
Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia.
The firm is licensed in Singapore, Indonesia, Thailand, registered in Malaysia, and operates in Vietnam.
Its recent strategic milestones include its acquisition of regional digital payments platform CardUp and co-investment into Bank Index in Indonesia.
Funding Societies | Modalku is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, BRI Ventures, VNG Corporation, Rapyd Ventures, Endeavor, EBDI, SGInnovative, Qualgro, and Golden Gate Ventures among others.
Norfund is the Norwegian Investment Fund for developing countries. Its mission is to create jobs and to improve lives by investing in businesses that drive sustainable development.
The fund is owned and funded by the Norwegian Government and is the government’s most important tool for strengthening the private sector in developing countries, and for reducing poverty.
Norfund’s committed portfolio totals $3.1 billio in Sub-Saharan Africa, South-East Asia, and Central America.
It has four investment areas – renewable energy, financial inclusion, scalable enterprises and green infrastructure.