After Three Countries, Modalku Spread Its Wings to Thailand
PT Mitrausaha Indonesia Group or Modalku is again expanding into Thailand, another Southeast Asian region after successfully penetrating the Indonesian, Malaysian, and Singapore markets. Modalku has now officially launched a peer-to-peer (P2P) lending platform brand titled ‘Funding Societies’ in Thailand, as it is also known in Singapore and Malaysia.
Precisely on February 2, 2021, the Funding Societies were granted a loan crowdfunding license by the Securities and Exchange Commission (SEC), Thailand’s financial regulatory body. With this permit, Thai Micro, Small and Medium Enterprises (MSMEs) and startups can use Funding Societies’ services to obtain business loans, both from individual and institutional lenders.
Reynold Wijaya, Co-Founder & CEO of Modalku, hopes that with the wider reach of the Modalku Group in Southeast Asia, it can support more potential MSMEs to develop their businesses.
“Our commitment to providing loan facilities in accordance with the needs of MSMEs is also demonstrated by becoming one of the licensed P2P lending operators in 4 Southeast Asian countries. Through collaboration between countries, the Modalku Group will continue to innovate to become the preferred fintech platform for all of our stakeholders,” he said, Tuesday (9/2/2021).
Built on the belief that every MSME has the potential to be eligible for a business loan, the Thai Funding Societies are committed to providing business actors with access to business capital as well as attractive investment alternatives for lenders.
There is a Gap in Business Funds in the Thai MSME Ecosystem
More than 50 percent of the 3 million MSMEs in Thailand are hampered by difficulties in obtaining business loans, particularly short-term business capital loans. Conventional financial institutions focus more on long-term loans or loans with collateral.
According to the International Finance Corporation, this situation has resulted in a gap in operating funds of more than USD40 billion for Thai MSMEs. Varun Bhandari, Country Head of the Funding Societies Thailand, added that this lack of funding was exacerbated by the Covid-19 pandemic, in which creditors have reduced access to loans to manage financial risks.
“MSMEs contribute 40 percent of Thailand’s GDP, but this segment faces many challenges when trying to access loans from conventional institutions, ranging from a lack of assets for collateral, difficult document requirements, and a long approval process,” he said.
Therefore, with technology, the Funding Societies offer MSMEs, as borrowers, a new way to get business loans that are fast, affordable, and simple.
“On the other hand, lenders in Thailand have the opportunity to expand their alternative investment instruments and generate attractive interest rates while empowering local businesses,” he added.
In Thailand, the Funding Societies will provide various loan options without collateral requirements to help MSMEs expand their business, obtain venture capital, or finance projects. With company technology, MSMEs can fill out a simple online application form, send several documents, then receive loan approval within 3 working days.
In Cooperation with E-commerce and Bank CIMB
The Modalku Group has also entered into regional cooperation with Lazada, Zilingo, and Bank CIMB in order to help serve MSMEs in their ecosystem. Lenders in Thailand will also be able to enter the Funding Societies crowdfunding platform to access opportunities to finance various business loans.
Through funding activities, lenders get diversification of attractive investment alternatives. Amid the COVID-19 pandemic, Modalku Group’s strong risk management has kept the loan default rate below 2 percent.
In the end, with this crowdfunding license from the SEC, the Modalku Group can bring its platform to Thailand to empower SMEs and local lenders. For your information, in Indonesia, Modalku provides peer-to-peer (P2P) lending services, where borrowers (potential MSMEs) can get unsecured business capital loans of up to IDR 2 billion.
These funds are obtained from platform lenders, whether individuals or institutions looking for investment alternatives through the digital market. To date, the Modalku Group, which started its business in 2016, has distributed business loans of around IDR 21.8 trillion with more than 3.7 million loan transactions.