Funding Societies secures $100m MDV facility to scale SME lending

KUALA LUMPUR, 21 SEPTEMBER 2026 —

Funding Societies has locked in a $100 million multi-year working capital facility from Malaysia Debt Ventures Bhd (MDV), a government-linked financing arm, to expand digital lending for underserved Malaysian SMEs.

The facility extends a 2022 partnership between the two entities, when MDV first participated in Funding Societies’ platform to support technology-driven SMEs. According to Chai Kien Poon, country head of Funding Societies Malaysia, the deal allows MDV’s capital to support thousands of businesses rather than individual loans, scaling development financing to meet Malaysia’s SME financing needs.

"This marks the next step in a long-term partnership," he said, noting the alignment with Malaysia’s New Industrial Master Plan 2030, which aims to elevate businesses toward mid-tier status.

The financing leverages Funding Societies’ digital infrastructure—alternative data, faster approvals, and lower per-loan costs—to extend credit to segments traditionally excluded from conventional banking. SMEs account for 96.1% of Malaysian businesses, generate 39% of GDP, and employ half the national workforce, according to Bank Negara Malaysia data.

To date, Funding Societies has disbursed $1.8 billion (RM7 billion) to over 10,000 Malaysian SMEs, while MDV has approved $3.5 billion (RM14 billion) across 1,184 technology projects since its 2002 launch.

Sharul Sazman Samaan, MDV’s chief business officer, described the collaboration as a way to channel development financing more efficiently to SMEs with smaller, high-velocity capital needs. "By supporting an established platform with strong digital capabilities, we can scale our impact," he said, emphasizing the facility’s role in reducing financing gaps for tech-oriented businesses.

The partnership reflects broader efforts to deepen Malaysia’s fintech ecosystem, where digital lending platforms have gained traction amid persistent SME credit constraints. Traditional banks remain cautious about extending loans to early-stage ventures, while alternative lenders like Funding Societies—backed by institutional players such as MDV—are filling the void. The facility also complements government initiatives like the SME Digitalisation Strategic Plan, which targets RM10 billion in digital adoption funding by 2025.

The deal could pressure incumbent banks to refine their SME lending models, particularly as Funding Societies’ alternative-data approach demonstrates viability at scale. Maybank Investment Bank, for instance, has previously cited SME credit risk as a hurdle to expanding its digital banking portfolio, though its SME i platform has seen gradual uptake. The MDV facility may also spur other government-linked entities—such as Cagamas or Permodalan Nasional Bhd (PNB)—to explore similar fintech partnerships.

Outlook for the sector hinges on regulatory clarity and risk-sharing mechanisms. Bank Negara Malaysia has signaled support for fintech innovation, including pilot programs for alternative credit scoring, but outstanding questions remain over collateral requirements and cross-platform data-sharing. If resolved, the MDV-Funding Societies model could serve as a template for public-private collaborations in Malaysia’s RM1.2 trillion SME financing market, where demand for growth capital remains unmet.

Both parties have indicated plans to explore further expansions, including sector-specific funds for high-potential industries like green technology and digital services.