PETALING JAYA: Direct Lending Sdn Bhd’s auto service financing is experiencing rapid growth with more than 1,000 workshops onboarded and a tenfold increase in the number of car owners benefiting each month since the solution was launched 1½ years ago.

Direct Lending founder Hui Yik Seong said the company is on the right trajectory in its mission to provide safe and accessible financing solutions for car repair needs.

“We created auto service financing to address the common scenario where a car breaks down, and people may not have immediate financing to cover the repair costs. This is how we collaborate with workshops to offer a convenient product tailored to car owners’ needs.

“It’s all powered by technology and data, simplifying the user experience, being inclusive by considering alternative data sources, ensuring syariah compliance, and maintaining transparency. Our technology enables us to serve customers from various locations across the country, from Peninsular Malaysia to Sabah and Sarawak,” he told SunBiz.

The auto service financing enables car owners to address vehicle repairs and settle payments later, offering installment plans ranging from three to 12 months. In a recent development, the company partnered with Petronas AutoExpert to introduce a fully digital car service installment plan, which is available at all 55 Petronas AutoExpert centres nationwide.

Hui disclosed that the current percentage of loans over 60 days overdue, classified as non-performing loans, stands at less than 3% of the overall portfolio. “This, in my view, serves as evidence that we are likely on the right track at this moment,” he added.

Looking ahead, Hui said Direct Lending intends to continue expanding its auto service financing, collaborating with industry players, and exploring opportunities for growth, both within Malaysia and across Southeast Asia.

Direct Lending is open to fundraising and strategic partnerships to accelerate its mission of addressing the financial gap for the underserved in this segment unattended by mainstream banks and other existing players.

“We see significant growth potential in the auto service segment based on the positive traction we’ve gained. With the right funding or financing, we can potentially accelerate its expansion,” he added.

In addition to its auto service financing, Direct Lending provides SME micro loans/financing (Islamic or conventional) to support SMEs with business expansion and working capital needs.

“Many car workshops are micro or small-sized businesses that require financing for growth and working capital. We have received inquiries from them, and we believe our relationships and insights can help them make their financing more efficient,” Hui said.

On the outlook of the business, he said there are more opportunities, particularly in serving the underserved segments whether in emergency car repairs, medical bills, as well as supporting small businesses’ growth.

“However, it is essential to manage risks carefully and avoid overleveraging households. As for financing for growth purposes, it is still uncertain due to recent increases in interest rates. We cannot predict the future, so we evaluate opportunities on a case-by-case basis, focusing on businesses and individuals needs.

“Overall, we believe there is a lot of room for growth in our current position,” Hui concluded.