Funding Societies, the largest unified SME digital finance platform in Malaysia and Southeast Asia, has forged a strategic partnership with Halal Development Corporation Berhad (HDC), a Malaysian federal government agency under the Ministry of International Trade and Industry (MITI). The collaboration aims to offer halal businesses access to Shariah-compliant digital financing facilities, enhancing the development of the halal ecosystem.
The partnership was formalised with the exchange of a Memorandum of Agreement (MoA) between Syarina Hyzah Zakaria, Partnerships Lead of Funding Societies Malaysia, and Hairol Ariffein Sahari, Chief Executive Officer of HDC, and was witnessed by Ahli Majlis Mesyuarat Kerajaan Negeri Perak YB Encik Mohd Azlan Helmi Helmi at the Jelajah Halal Malaysia 2023 event in Ipoh, Perak.
The collaboration supports the development of the local halal industry and caters to the growing global halal market, which is forecasted to be worth USD 5 trillion (MYR 23.4 trillion) by 2030. Locally, the Halal Industry Master Plan 2030 projects Malaysia’s halal industry to grow to USD 113.2 billion (MYR 529.8 billion) in 2030 and is projected to contribute 8.1 per cent to gross domestic product (GDP) by 2025. As of 2022, the total halal export was valued at MYR 59.5 billion, with the halal industry contributing 7.4 per cent to the country’s GDP.
Chai Kien Poon, Country Head of Funding Societies Malaysia said, “Consequent to the introduction of our comprehensive Islamic Financing solutions in May 2023, we are well positioned to serve the growing demand for Shariah-compliant SME digital financing from Muslim entrepreneurs and those in the halal economy. Increasingly, given the emphasis on fairness and transparency of fees and charges, this class of products appeals to non-Muslims alike. Since the launch, Funding Societies has disbursed more than MYR 100 million under its Islamic Financing solutions.
“This collaboration will help to boost trade and investment activities in the halal economy as well as expand market access (export) for halal industry players in the country,” Chai added.
Hairol Ariffien Sahari, Chief Executive Officer of HDC said, “Collaboration between HDC and Funding Societies is a testament that HDC is proactively finding ways to address challenges faced by the underserved groups to participate in the Halal economy. Our goal is to empower micro-SMEs (MSMEs) and to close the gaps for the underserved in the Halal Economy so that we can create a more conducive environment that cultivates more Halal homegrown champions.”
According to the Department of Statistics Malaysia (DOSM), MSMEs represent 97 per cent or 1.2 million of overall business establishments as of 2022. As the backbone of the Malaysian economy, which accounts for almost half of total employment, SMEs’ ability to participate in the nation’s economic trajectory is crucial to the country’s growth.
The introduction of government policies through support packages in the 2023 Malaysia Madani Budget, coupled with collaborations within the private sector, such as Funding Societies, will help widen access to business financing for micro small and medium enterprises (MSMEs) and help sustainably advance the Malaysian economy especially in the development of the halal industry.
The signing of the memorandum comes at an important juncture for the Malaysian Halal Ecosystem as it reinforces the private sector’s role and commitment in driving and supporting the nation’s MSMEs and economic growth in line with the goals outlined in Belanjawan 2024.
Operating in Malaysia since 2017, Funding Societies has provided financing to thousands of underserved and unserved SMEs in the country and disbursed more than MYR 2 billion in financing in Malaysia since its inception. Across the region, more than MYR 15 billion has been disbursed in working capital through more than 5 million transactions as of November 2023. The Fintech platform targets to have 50 per cent of its disbursement from its Shariah-compliant financing portfolio by 2025.
Source: Funding Societies
