Funding Societies offer SMEs repayment deferment, rescheduling options

CORONAVIRUS | Funding Societies, the largest peer-to-peer (P2P) financing platform in Malaysia, is offering deferment or rescheduling options to help small and medium enterprises (SMEs) face challenges brought on by Covid-19.

Co-founder and chief executive officer Wong Kah Meng said the deferment or rescheduling options would provide cash flow relief to SMEs to sustain their businesses and, in turn, safeguard jobs, particularly in the adversely affected sectors like offline-focused retailers, wholesale traders and manufacturers involved in imports and exports, construction of new projects, and tourism and hospitality.

“As we are fully aware, SMEs are the backbone of our country, contributing close to 40 per cent of the gross domestic product (GDP) and 66 percent of total employment.

"However, they are also the most vulnerable to a volatile economic environment, particularly amid this coronavirus ‘blackswan’ event that we are experiencing at the moment, and we are compelled to protect the best interests of our investors who, together with us, have been supporting these SMEs," he said in a statement today.

He said as of March, approximately 10 percent of Funding Societies’ SME clients have requested for rescheduling of their repayments, and the figure is expected to increase over the coming weeks, especially if the movement control order (MCO) persisted.

Wong said the platform continued to closely monitor any developments that could further impact its SMEs and investors and offer help in any way possible.

He said at the same time, the platform has also been actively engaging the Securities Commission and government agencies to identify potential approaches to support impacted SMEs and investors.

Given the sudden and wide-reaching implications on business activities, he said government support and funding are critical to ensure that SMEs are able to tide over these trying times.

He said P2P financing platforms are the most effective channel that the government can reach out to and support these SMEs, consistent with the sentiment across the FinTech industry globally, as it focused on serving micro and SME entrepreneurs who are most impacted and the majority of whom do not have existing financing from banks.

- Bernama

Keep up with the latest information on the outbreak in the country with Malaysiakini's free Covid-19 tracker.

Malaysiakini is providing free access to the most important updates on the coronavirus pandemic. You can find them here.

Help keep independent media alive - subscribe to Malaysiakini.