KUALA LUMPUR, 3 April 2020 – Funding Societies, the largest P2P financing platform in Malaysia, is stepping up efforts by offering deferment or rescheduling options to help tide small and medium-sized enterprises (SMEs) over as they face challenges brought on by the COVID-19 outbreak.
Following first quarter of 2020, the outbreak has already caused a further economic challenge, placing additional pressure on companies that were already faced with an uncertain business outlook.
Among these businesses, SMEs especially are the most vulnerable as they struggle in managing their cash flow, inventory and distribution of goods and services during this trying time.
The customized deferment or rescheduling option will provide cash flow relief to SMEs to sustain their businesses and, in turn, safeguard jobs, particularly in adversely affected sectors including offline-focused retailers, wholesale traders and manufacturers involved in imports and exports, construction of new projects, and tourism and hospitality.
Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, said that the team foresee slower economic activity in coming months and hence, an increase in repayment deferment requests from SMEs.
They have been actively engaging with affected SMEs to understand how their businesses have been impacted in the current circumstances and implications on their repayment capacity in the near term.
From there, they will propose deferment or rescheduling options to these impacted SMEs to help them tide through this challenging period. Through this, the team strive towards a win-win proposition for their SMEs and investors as it provides an opportunity for SMEs to recover and consequently continue to make repayments to investors.
Simultaneously, the platform has also been actively engaging with the Securities Commission and government agencies to identify potential approaches to support impacted SMEs and investors.
As P2P financing platforms focus on serving micro and small SMEs, which are most impacted and the majority of which do not have existing financing from banks, P2P financing platforms are the most effective channel through which the government can reach out to and support these SMEs, consistent with the sentiment across the Fintech industry globally.
“Nevertheless, we are hopeful that this ‘black swan’ event would serve as a catalyst to spur the next wave of digitalisation of businesses in Malaysia as well as the emergence of new digital business models, which directly will benefit the P2P financing industry given its digital focus.”
Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia