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Funding Societies said in a statement on Wednesday that the collaboration aims to offer halal businesses access to Shariah-compliant digital financing facilities, enhancing the development of the halal ecosystem.
According to the statement, the collaboration supports the development of the local halal industry and caters to the growing global halal market, which is forecasted to be worth $5 trillion by 2030.
Locally, the Halal Industry Master Plan 2030 projects Malaysia’s halal industry to grow to $113.2 billion in 2030 and is projected to contribute 8.1 percent to gross domestic product (GDP) by 2025.
As at 2022, the total halal export was valued at 59.5 billion, with the halal industry contributing 7.4 percent to the country’s gross domestic product (GDP).
“Consequent to the introduction of our comprehensive Islamic Financing solutions in May 2023, we are well positioned to serve the growing demand for Shariah-compliant SME digital financing from Muslim entrepreneurs and those in the halal economy,
“Increasingly, given the emphasis on fairness and transparency of fees and charges, this class of products appeals to non-Muslims alike,” said Chai Kien Poon, Country Head of Funding Societies Malaysia.
He said that since the launch, Funding Societies has disbursed more than MYR 100 million ($21.49 million) under its Islamic Financing solutions.
“This collaboration will help to boost trade and investment activities in the halal economy as well as expand market access (export) for halal industry players in the country,” he added.
HDC Chief Executive Officer Hairol Ariffien Sahari said that the collaboration between HDC and Funding Societies is a testament that HDC is proactively finding ways to address
challenges faced by the underserved groups to participate in the Halal economy.
“Our goal is to empower micro-SMEs (MSMEs) and to close the gaps for the underserved in the halal economy so that we can create a more conducive environment that cultivates more halal homegrown champions,” he added.
Cited the Department of Statistics Malaysia (DOSM), Funding Societies noted that MSMEs represent 97 percent or 1.2 million of overall business establishments as of 2022.
As the backbone of the Malaysian economy, which accounts for almost half of total employment, it said SMEs’ ability to participate in the nation’s economic trajectory is crucial to the country’s growth.
According to the statement, the introduction of government policies through support packages in the 2023 Malaysia Madani Budget, coupled with collaborations within the private sector, such as Funding Societies, will help widen access to business financing for MSMEs and help sustainably advance the Malaysian economy especially in the development of the halal industry.
It said the signing of the memorandum comes at an important juncture for the malaysian halal ecosystem as it reinforces the private sector’s role and commitment in driving and supporting the nation’s MSMEs and economic growth in line with the goals outlined in Budget 2024.
Operating in Malaysia since 2017, Funding Societies has provided financing to thousands of underserved and unserved SMEs in the country and disbursed more than MYR 2 billion ($430,000) in financing in Malaysia since its inception.
Across the region, more than MYR 15 billion ($3.22 billion) has been disbursed in working capital through more than 5 million transactions as of November 2023.
The fintech platform targets to have 50 percent of its disbursement from its Shariah-compliant financing portfolio by 2025.
Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia.
It is registered with the Securities Commission Malaysia (SC), as well as licensed in Singapore, Indonesia, and Thailand, and operates in Vietnam.
The firm is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, and Golden Gate Ventures amongst others.
The fintech company provides business financing to SMEs, which are funded by individual and institutional investors.
HDC is a dynamic organization dedicated to promoting and facilitating the development of the halal industry in Malaysia.
Committed to driving innovation and growth, HDC plays a pivotal role in supporting businesses within the halal economy.
