A New and Exciting P2P Financing Option for SMEs - Jiran

A New and Exciting P2P Financing Option for SMEs

Worried about funding needs for your business? Fret no more!

Published on 7 October 2020

From the familiar neighbourhood in which you spent your younger years, to the major cities across the nation — we are surrounded by a landscape of small and medium enterprises (SMEs) that are flourishing in different corners of each state. SMEs play a large and important role in encouraging progress and innovation for our local communities. The sector provides for about 70% of our workforce. Item powers everyone from your uncles and aunties in Kedah to the abang and kakak in Negeri Sembilan to pursue their business endeavours. With over 98.5% of the business establishments in Malaysia made up of SMEs, it comes as no surprise that both the rakyat and the government recognise them as the backbone of our economy.

During this trying period filled with economic uncertainties, different communities across Malaysia are facing their own set of challenges to survive. Businesses that we loved and grew up with took a hit, with a list ranging from the iconic Speedy Video store in our local malls to the smaller and cosier establishments like Ampang Point’s Reader’s Paradise. SMEs are not an exempted group as it was reported that over 4,000 SMEs were forced to shut down largely due to cash flow problems. Despite existing initiatives and government incentives, such as the PRIHATIN and PENJANA stimulus packages for SMEs that were activated to lessen their burden, the hardship still lingers for most business owners.

Some of the challenges have always been an existing problem since even before the emergence of the pandemic. SME owners would often encounter difficulties in obtaining financing from traditional institutions, including long application processes and laborious documentation. For smaller businesses, the tendency to be perceived by financial institutions as not very bankable is a common problem making the average rejection rate to stand at about 20%. Due to these issues, SMEs are now opting for alternative channels like peer-to-peer (P2P) financing to meet their needs and overcome the financing gap.

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How P2P financing addresses SME financing gap

In 2016, Malaysia successfully made headlines by becoming the first country in South East Asia to regulate P2P financing platforms. Since then, P2P financing has gained traction amongst SMEs. Through these digital P2P financing platforms, SMEs have the choice of obtaining their financing directly from a pool of investors in the form of crowdfunding and can navigate the trouble of having to apply for financing through the traditional way. In the past, SMEs that have not been operating for long tend to face problems when they do not possess the requisite years of audited accounts which is a common requirement for banks. P2P financing offers flexibility as newly established SMEs can still be funded directly by retail and institutional investors.

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Funding Societies, the first and largest P2P financing platform in Malaysia

Launched in 2015 with the aim of uplifting societies through financial opportunities is fintech firm, Funding Societies. With more than 50% market share, Funding Societies has disbursed more than RM500 million in Malaysia and established itself as the biggest P2P financing platform in the country and the region. Catering for businesses particularly the underserved and unserved SMEs, Funding Societies has a variety of customized financing options and product offerings that would suit different financing needs. This platform allows SMEs to fully leverage on the ease and efficiency of new technologies for an enhanced application experience and process.

Newly launched collaboration with Yellow Pages Malaysia

As part of its strategy to widen its reach to better serve SMEs across the region, Funding Societies has collaborated with various platforms and companies. Some of their notable partnerships include used car marketplaces, e-wallet and payment gateway providers, e-commerce platforms, and telecommunications providers, among others. Its latest partnership features an exciting collaboration with Yellow Pages Malaysia, the ultimate directory listing services to help Malaysians discover and experience all things local. Through this engagement, Yellow Pages hopes to provide financing to eligible brands and businesses on its platform, complementing its full suite of digital advertising solutions.

This much-awaited good news will allow your business to enjoy all the benefits of a P2P platform, which include easy online application process, quick turnaround time from application all the way to disbursement — without any collateral requirements! The documents required are also minimal so you don’t have to pening kepala anymore to figure out the whole procedure.

So, do not wait too long!

To know more about the collaboration between Yellow Pages and Funding Societies, please read the press release here. If you’re a small business owner yourself, head on over to www.yellowpages.my/fundingsocieties and find out how to secure your own funding through this hassle-free P2P financing platform.