A fresh funding platform for tiny and medium businesses (SMEs), Funding Societies, has entered Thailand to supply their fundraising solutions to SMEs and startups in the united states, according to February 10 release.
Funding Societies was founded in 2015 in Singapore because an electronic finance and crowdfunding platform and was the first ever to engage an escrow agency to independently and safely manage investors’ money, it says. Meanwhile, it expanded to Indonesia and Malaysia using its peer-to-peer lending business design and has since presented crowdfunded loans to a lot more than 65,000 SMEs in the three countries with over $1.5 billion in funding from retail and institutional investors.
The business is backed by venture investors such as Sequoia India, Softbank Ventures Asia Corp, Qualgro and Line Ventures, amidst others.
Access to alternative capital
After having obtained a debt crowdfunding license by the Thai Securities and Exchange Commission on February 2, the company is now expanding to Thailand, targeting Thai SMEs, startups and entrepreneurs by giving usage of alternative capital providers.
Thailand has a lot more than 3 million SMEs, based on the company, but over fifty percent of them face multiple challenges in obtaining financing found in a conventional way from banking institutions, especially to meet short-term working capital requirements.
Traditional financial institutions give attention to long-term and asset-backed loans, leaving a SME financing gap of above $40 billion, according to the Foreign Finance Corporation, in line with the release. This lack of funding offers been exacerbated by the Covid-19 pandemic as lenders have attempted to reduce their bank loan exposures in order to manage risk.
“SMEs contribute over 40 % to the Thai GDP but face numerous challenges found in accessing financing from traditional sources because of insufficient collateral, onerous document requirements and lengthy approval functions,” says Varun Bhandari, region head of Financing Societies Thailand.
Diversified crowdfunding investment for low default rates
“By leveraging technology, Financing Societies presents SMEs a fresh avenue for raising financing that is fast, cost-effective and convenient. Thai traders may also get an opportunity to diversify their investments and generate attractive fixed profits returns, while supporting native businesses and brands,” he added.
Financing Societies says it provides a variety of collateral-free funding to greatly help SMEs with their organization expansion, working capital demands or up-front job costs. Applications could be made on the net by submitting basic records, the company noted.
In turn, for investors, contributions to the crowdfunding platform would play a large purpose in diversifying their investments and help enhance overall portfolio returns, the business said, asserting that its risk controls have limited defaults to below two per cent even amid the Covid-19 pandemic.