Heaptalk, Jakarta — Modalku Group, a digital funding platform for the SEA MSMEs, has officially signed a USD50 million contract with HSBC Singapore to provide a credit facility for the potential MSMEs that are still unserved optimally.
Through this cooperation, HSBC will participate as a structuring bank, lender, facility, and security agent to provide financing services that are more flexible, sizable, and semi-regional in terms of contributing to Modalku Group’s business expansion around the covered areas to support the potential MSMEs.
The Asia Pacific commercial lending is predicted to increase by 16.5% by generating an income of over USD7 trillion in 2028, reaching 25% of the total global market of USD27.4 trillion. In general, MSME loans are not still underserved and have unequal digital transformation speed compared to retail loans.
To assist the simplicity of loans service, Modalku has injected the capital of $2.5 billion devoted to 5.1 million MSMEs funding transactions in Indonesia, Malaysia, Singapore, Thailand, and Vietnam. By providing this credit facility, the institutional lenders can distribute funds through multiple customized financing solutions across the MSME segment in the five Modalku Group operating countries.
Co-Founder and CEO Modalku, Reynold Wijaya, conveyed, “We are honored to receive an ample credit facility from a global bank, HSBC. This collaboration is a critical milestone for us to prove our credit history during the COVID-19 pandemic. With the new insight of HSBC parties, global capacity, as well as scalable approach, has completed us to advance the MSMEs’ business growth with the limited funding access. We greatly appreciate working together with HSBC,”
The Southeast Asia business ecosystem is known to be dominated by MSMEs, reaching 97% with a GDP value of 40% across regions. The YCP Solidiance report reveals Indonesia has the highest internet economic growth and value, with the most considerable GDP contribution produced by SMEs at 61%. With this strategic partnership, HSBC can expand the global market penetration through the potential MSME segment that is still unreached optimally throughout the regions.
Regina Lee, Head of Commercial Banking at HSBC Singapore, stated that the Modalku Group could contribute to Southeast Asia’s economic growth by boosting extensive financing inclusion and supporting local enterprises. Perceiving a similar mission with HSBC, Regina claimed her parties are enthusiastic about helping Modalku Group expand the business reach and bolstering the potential MSMEs in their regions.
Prior to collaborating with HSBC Bank, Modalku Group recently acquired the regional digital financing platform, CardUp, as part of the company’s efforts to diversify services beyond lending. Also, Modalku Group obtained Series C+ equity funding worth $144 million in February 2022. In addition, this Indonesia-based financing platform has invested in Index Bank in Indonesia and successfully broadened the fifth market penetration in Vietnam.
