Earlier this year, HSBC entered into debt facilities with Grab Financial Group, Atome Financial and Funding Societies for an undisclosed amount, US$100 million and US$50 million respectively.
Grab, through its own PayLater service, extends working-capital loans to financially underserved merchant-partners. Atome, with its BNPL concept, helps consumers to cover the costs to merchants incurred at the point of purchase. And Funding Societies disburses loans to small businesses.
Funding support is integral to these companies’ business models, where cash flow is important. The bigger the business, the bigger the funding gap, she adds. “And that’s how the bank can come in to support them.”
By structuring scalable debt financing solutions, HSBC provides a means for these companies to grow their portfolios, expand their customer reach and accelerate the path towards profitability.
For example, Funding Societies, which is licensed and registered in Singapore, Indonesia, Malaysia and Thailand and operates in Vietnam, has served close to 100,000 underserved SMEs across the region.
According to the SME digital financing platform, it has disbursed loans of close to US$2.8 billion, and processed more than 5.1 million transactions since 2015 across the 5 countries it operates in.
“Since 2019, we have focused on both growth and profitability, and expect to be self-sufficient in the near future,” says Kelvin Teo, its Cofounder and Group Chief Executive Officer.
Teo explains that HSBC’s credit facility has not only helped them to scale more confidently to serve more SMEs, it has also served as a vote of confidence and attracted interest from other financial institutions.
These credit facilities are not HSBC’s first effort to support tech companies’ on their growth journey. In late 2021, it launched a US$200 million lending fund to support high-growth tech companies in Singapore planning to expand in Southeast Asia or even further abroad.