About four months after Funding Societies temporarily halted its crowdfunding loan terms in order to ensure it met regulations set by the Monetary Authority of Singapore (MAS), the Singaporean startup announced today it has received an in-principle Capital Markets Services (CMS) license from the nation’s central bank.
The license will allow Funding Societies to deal in securities for lending-based crowdfunding for all classes of investors in Singapore. The company said it will commence crowdfunding for both accredited and non-accredited investors once it clears some requirements set by MAS.
Funding Societies is a a P2B lending platform targeting SMEs to help them secure loans for growth. It has helped facilitate S$16 million (US$8.6 million) in loans to over 200 businesses.
“It comes at an opportune time for us and SMEs, who have recently re-cited financing as one of the biggest problems they are facing,” said Kelvin Teo, Co-founder of Funding Societies, in an official statement.
The CMS license is essential for lending-based crowdfunding platforms to operate in Singapore. Last week, the equity crowdfunding platform Fundnel also received an in-principle license from MAS.
Funding Societies also announced today that it will be expanding to Malaysia. As one of six companies to be granted a license to operate starting in the first half of 2017, it will be incorporated as Modalku Ventures. The startup also has operations in Indonesia.
According to a report from Deloitte, SMEs employ 58 per cent of Malaysia’s population and contribute to 33 per cent of the nation’s GDP. However, 55 per cent of SMEs said they required a larger amount for their loans to handle the cost of doing business.
“One of the challenges in SME financing is that their financial requirements are too large for microfinance, but are too small to be effectively served by corporate banking models,” the report read.
Funding Societies is trying to provide an alternative lending channel for these types of businesses.
The company raised a S$10 million (US$7.2 million) Series A led by Sequoia India in August.
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