Funding Societies raises USD 7.5 mln from Norfund

Norfund is a Development Financial Institution (DFI), which operates an investment fund owned by the Norwegian government for developing countries. This is the first debt transaction by Norfund with a fintech SME lender in Southeast Asia.

Empowering Southeast Asian SMEs through impact investments

Impact investments made by DFIs in Southeast Asia have seen a steady investment of about USD 2 billion annually between 2017 and 2022 (amounting to over USD 12 billion), as per the press release. Over half of these investments were channelled into the financial services sector, with the majority of the capital deployed through debt instruments. DFIs have the capacity and capabilities to support SMEs where commercial lenders and governments cannot, due to their strong financial position.

Norfund specialises in enhancing financial inclusion, having provided USD 4.54 billion in loans to 7.5 million clients. Funding Societies, dedicated to empowering SMEs, has funded over USD 3.2 billion to 100,000 businesses across the region. This fundraise enables them to extend tailored financing solutions to SMEs in all five markets they serve.

Officials from Funding societies said they’re happy to partner with Norfund, backed by the Norwegian government. This milestone is not only a testament to their 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. They appreciate Norfund’s support in their mission and commitment to giving a fair opportunity for SMEs.

Enabling growth

Businesses categorised as micro, small and medium enterprises (MSMEs) account for 99.9% of total establishments in the ASEAN region – contributing to 44.8% to the region’s GDP (gross domestic product). This debt transaction will serve as a bridge, via Funding Societies, for the funds Norfund manages between the public and private sectors in mobilising the reach of its investments further into Southeast Asia.

Representatives from Norfund said they 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. They 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.