The largest peer-to-peer (P2P) financing platform in Malaysia, Funding Societies, has reassured its commitment in safeguarding its clients’ investments by adjusting its risk assessment measures, particularly against the backdrop of the current economic uncertainties resulting from the coronavirus (COVID-19) pandemic.
As the nation is coming to terms with the implications of the pandemic’s sudden, significant and likely persistent impact towards the economy, the platform has taken a multi-pronged approach to further tighten its risk assessment processes, ensuring clients’ investments remain protected while simultaneously continuing to lend a helping hand to support the under-served SMEs who are affected by the outbreak.
Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, commented, “No part of the economy as well as businesses or individuals, have been immune to the impact of COVID-19. As an alternative financing platform which relies heavily on the trust of our investors, a key principle in our decision-making process is to protect our investors from undue risk. On this note, and to weather this challenging period for investing, we have taken a multi-pronged approach to ensure that we continue to safeguard our investors’ interests.”
He added, “Some measures that we have taken include, but not limited to (1) Assessing the impact of COVID-19 and the ongoing Movement Control Order (MCO) on our SME clients’ repayment capabilities; (2) Revising industry focus and implementing shorter financing tenures; (3) Reviewing existing SMEs’ exposures and, where justified, reducing concentration risk following reduced business activities; and (4) Implementing monitoring and action plans for impacted SMEs. Following these measures and where warranted, we would align with the impacted SMEs on a reasonable deferment plan. Restructuring is another option that we can consider, given there is such a request, and that specific requirements are fulfilled by the SMEs. As a responsible P2P financing platform, we have a delicate balance that we must strike, between safeguarding our investors’ interest and remaining committed to supporting underserved SMEs.”
Funding Societies has also recently conducted a survey amongst its investors to gather their inputs on ways to support impacted SMEs on the platform. The majority of respondents are supportive of assistance in the form of a deferment plan to help provide cash flow relief to SMEs to sustain their businesses and, in turn, safeguard jobs, particularly in adversely affected sectors. Through the deferment plan, Funding Societies is striving for a win-win proposition for their investors and SMEs as it provides an opportunity for SMEs to recover and consequently continue to make repayments to investors.
“We remain steadfast that all of us (including SMEs and investors alike) will emerge stronger from this blackswan event and we appreciate their trust in us in driving greater access to financing for SMEs not only in Malaysia, but across the region,” Wong concluded.