KUALA LUMPUR: Malaysian-founded peer-to-peer (P2P) financing platform Funding Societies has launched its debt crowdfunding platform in Malaysia and aims to disburse RM10 million to RM20 million to 100 to 200 small and medium enterprises (SMEs) in the first year. Its co-founder Kelvin Teo said since June 2015, Funding Societies has disbursed almost RM90 million in financing across 400 deals in Singapore and Indonesia. “Our goal is not to grow fast but to grow safe,” Teo told a press conference after launching the platform yesterday, adding that it is easy to achieve high numbers but pointed out that it is critical to manage the risks for investors. Funding Societies provides SMEs and investors an alternative financing and investment opportunities. It provides an easy and viable option for SMEs looking for short-term financing between one and 12 months. It also meets the needs of SMEs that require small financing needs (between RM50,000 and RM500,000), fast disbursal (one week) and a simple hassle-free application process. “Banks like to give big (quantum), long (tenure) and cheap (lower interest rates) loans but it’s slow. We’re almost the opposite. We’re small (quantum), short (tenure) and more expensive (higher interest rate of 10-18%), but fast. We’re willing to give credit to a bigger segment of SMEs that banks are not going to do,” said Teo, adding that it sees itself as complementing banks. Funding Societies, run by Modalku Ventures Sdn Bhd, is one of six P2P operators recognised and regulated by the Securities Commission Malaysia. Funding Societies has a 2% default rate, being one of the lowest in the region. “Compared with Singapore, Malaysia is a riskier market from a credit perspective and we expect credit default rates to be potentially higher. (But) this is all embedded in our credit risk management approach. We also expect investors to get a 5-9% returns. From a credit management perspective, we’re more stringent but more flexible than banks,” said Teo. Funding Societies Malaysia CEO Wong Kah Meng said it offers investment opportunities to SMEs of various sizes across key industries, including manufacturing, wholesale and retail trade, construction and food and beverage. By serving a variety of sectors, investors are also able to better diversify their investment portfolio and minimise risks. For Malaysia, Wong said it is offering term financing and invoice financing in 2017, and intends to roll out micro financing in 2018. With 4,000 registered investors in Singapore, Funding Societies Malaysia hopes to have 2,000 investors in the next 12 months. “These investors are mostly retail investors and mostly professionals between 20-40 years old who have some additional cash to invest. We also look to partner institutional investors like what we do in Singapore and Indonesia,” said Wong. Eligible team members at Funding Societies also personally co-invest in SMEs alongside investors. Funding Societies is funded by global and regional venture capital firms, Sequoia India and Alpha JWC.