Iza Fazlina Binti Mohd Nor, a Malaysian entrepreneur from Georgetown, Penang, has been running her small food business for six years. From humble beginnings, her journey reflects the determination and resilience of Malaysia’s micro, small, and medium enterprises (MSMEs). With the support of imSME, a digital platform by CGC Digital Malaysia that provides financing and business solutions to help MSMEs grow, she has been able to explore new ways to strengthen and expand her business.

Building a Business from the Ground Up

Puan Iza started Nasi Campur Kak Iza to serve hearty, home-style dishes to her community. Like many small entrepreneurs, she faced daily challenges, from managing operations and attracting customers to maintaining a steady income.

“Running a small business comes with its challenges, but it also teaches you to stay determined and keep improving,” she said.

Her dedication to quality and service has helped her steadily grow a loyal customer base over the years.

Discovering Support Through imSME

Puan Iza first came across imSME through an online advertisement. The platform, developed by CGC Digital Malaysia, offers digital solutions including financing, digital guarantees, and insurance—designed to help MSMEs strengthen and grow their businesses.

As a small business owner, she often found it challenging to secure the right support to expand her operations. Through the imSME platform, she was able to explore solutions suited to her business needs and explore financing options designed for MSMEs.

While exploring the platform, she also noticed the imSME VIP Umrah Campaign, which encouraged her to engage further with the platform’s offerings.

“The campaign encouraged me to explore imSME further and showed me new ways to grow my business,” she shared.

A Meaningful Opportunity

Being selected as one of the campaign winners meant more than a prize. For Puan Iza, it represented a second chance to fulfil a spiritual aspiration she had long hoped for.

“I had previously tried to perform Umrah but was unable to, so this opportunity means so much to me,” she said.

Inspiring Others

Through her journey, Puan Iza hopes to inspire other entrepreneurs to remain resilient and take advantage of opportunities that can support their business growth.

Through imSME, CGC Digital Malaysia continues to empower the country’s MSME community by providing digital financing and business solutions tailored to their needs.

If you, like Puan Iza, want to explore financing solutions and support for your business, visit (https://imsme.com.my) today and register for free to discover how the platform can help your business grow.

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Through this partnership, SMEs can now apply for financing via Capsphere’s platform and benefit from credit risk-sharing support arrangement through CGC Digital. The offering includes Accounts Receivable (AR) and Accounts Payable (AP) financing. AR financing allows SMEs to access early payment on invoices, while AP financing supports timely supplier payments in enhancing cash flow, operational continuity, and supplier relationships.

“The launch of Capsphere’s AP and AR financing backed by CGC Digital Guarantee represents a key milestone in our mission to unlock fair and secure access to capital for SMEs,” said Yoon Jun Jie, CEO of Capsphere. “With CGC Digital’s support, we are raising the bar for trust and impact in Malaysia’s P2P financing space.”

This initiative reflects CGC Digital’s commitment to enabling inclusive, tech-driven financing for underserved and growing MSMEs. It also helps foster a more robust digital financing ecosystem through strategic de-risking partnerships.

“This collaboration with Capsphere is a strong addition to our expanding fintech ecosystem,” said Yushida Husin, CEO of CGC Digital. “We’re proud to support emerging digital platforms in broadening financing access while sharing risk to promote SME resilience.”

Key Features of the Capsphere and CGC Digital Initiative:

• Credit guarantees on a risk-sharing basis for eligible SME transactions
• Enhanced financing access for underserved and growth-stage businesses
• Seamless integration into Capsphere’s asset-based financing model.

The product is now live, with the first SME financing note currently open on the Capsphere platform. SMEs across Malaysia can apply online and benefit from CGC Digital’s credit risk-sharing support in helping reduce barriers to funding while safeguarding commercial discipline.

For more information, please visit

www.cgcdigital.com.my | www.imsme.com.my | www.b2bfinpal.com

About CGC Digital

CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, its primary goal is to empower Micro, Small, and Medium Enterprises (MSMEs) by creating a simpler and more seamless financing experience in the digital ecosystem.

For more information about CGC Digital, please visit www.cgcdigital.com.my.

About Capsphere
Capsphere is Malaysia’s first peer-to-peer (P2P) financing platform focused on asset-based funding. As a licensed Registered Market Operator (RMO) by the Securities Commission Malaysia, Capsphere connects SMEs and investors through innovative and secured financing structures.

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Supporting SME Digitalization and Financial Inclusion

This innovative collaboration is aimed at improving financing access for private clinics—many of which operate as small and medium-sized enterprises (SMEs)—by embedding loan and financing options within their existing digital workflows. It forms part of a broader effort to strengthen financial resilience among healthcare SMEs through alternative data and platform-based delivery.

A Digital Platform for End-to-End Clinic Management

Remedi provides an integrated solution for managing the full range of clinic operations. This includes appointment scheduling, billing, medical records, inventory control, and patient engagement, all in a seamless digital environment. The platform also captures valuable business insights that support predictive features, such as forecasting inventory needs.

“We are committed to helping clinics digitalize not only their operations, but also their access to financial and procurement services. Embedded financing is an innovative approach and natural step in building a full-service ecosystem for clinics and ensuring their operational sustainability as well,” said Khairul Faizi Khalid, Managing Director of Remedi.

In addition, the platform has launched a built-in procurement marketplace that allows clinics to order medical supplies and consumables directly, streamlining inventory management and making operations more efficient. By embedding financing into this ecosystem, clinics will be able to access working capital and business loans directly through the platform, reducing administrative burden and improving access to tailored funding.

“This initiative allows us to bring the alternative financing ecosystem closer to the point of need—supporting SMEs with both access and affordability,” said Yushida Husin, CEO of CGC Digital.

Bridging the Financing Gap by Connecting Ecosystems

This collaboration brings together critical components of the healthcare and lending ecosystems to address long-standing challenges in accessing financing:

• Remedi acts as the central hub, embedding financing tools within its operational interface and generating data to support credit evaluation.
• CGC Digital plays a facilitative role by enabling risk-sharing arrangements and connecting a broader network of financing partners to the platform leveraging CGC Digital’s financing marketplace, imSME.
• Seedflex provides flexible, performance-based financing tailored to clinics’ actual business activity, making capital more accessible and aligned with day-to-day operational realities.

By integrating financing into a platform already central to clinic operations, the partnership lowers barriers to funding, streamlines the application process, and enables more responsive and appropriate financing solutions—ultimately bridging the financing gap for a critical segment of healthcare SMEs.

“We’re excited to collaborate with Remedi and CGC Digital to provide flexible financing to address the real-life credit needs of healthcare clinics. This partnership allows us to continue pursuing our vision to bridge the credit gap for SMEs and give business owners of any size the same fair access to capital regardless of their background,” added Ritwik Ghosh, Co-Founder and CEO of Seedflex.

For more information, please visit

www.cgcdigital.com.my | www.imsme.com.my | www.b2bfinpal.com

About CGC Digital

CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, its primary goal is to empower Micro, Small, and Medium Enterprises (MSMEs) by creating a simpler and more seamless financing experience in the digital ecosystem.

For more information about CGC Digital, please visit www.cgcdigital.com.my

About Remedi

Remedi, a leading digital health company specialising in Electronic Medical Record solutions is renowned for its fast-growing cloud-based Clinic Management Solutions trusted by over 500 clinics nationwide. Remedi is dedicated to enhancing the patient experience by improving primary care healthcare service efficiency and delivery with the use of innovative automation and digitalization of workflow in clinics.

About Seedflex

Seedflex is a new way of accessing credit for cashless businesses, co-founded by two former Grab executives who built the superapp company’s fintech lending business in Southeast Asia. Seedflex provides a new frictionless form of credit to cashless businesses by underwriting and collecting loans based on online sales alone. Real-time and granular transaction data provides sufficient basis for robust underwriting driven by proprietary credit scoring and strategy, while daily settlement of sales enables an opportunity for fractional and automated collection through Seedflex’s proprietary “Pay-As-You-Sell Advance”™ solution.

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This collaboration introduces a bespoke credit guarantee scheme by CGC Digital to support B2B Finpal’s Purchase Financing product—an innovative, short-term financing solution designed to help MSMEs meet capital needs during procurement cycles. The initiative addresses long-standing financing gaps by combining digital innovation with tailored risk-sharing mechanisms.

Key features of the Purchase Financing programme include:

• Financing of up to RM300,000 – Empowering MSMEs to fulfil larger purchase orders.
• Short-term tenure of up to 120 days – Supporting efficient procurement and fulfilment without immediate financial strain.
• Fast approvals within five days – Ensuring quick access to funds when MSMEs need it most.

The partnership marks the first phase of a broader, scalable programme, with both parties committed to co-developing more financing products to further strengthen MSME financial inclusion across Malaysia.

In addition, the Purchase Financing product will be made available on imSME, Malaysia’s first online financing referral platform for MSMEs, operated by CGC Digital. This integration is set to increase visibility and accessibility, helping more businesses identify and secure suitable financing solutions.

“This partnership reflects our commitment to accelerating MSME growth by collaborating with alternative finance providers,” said Yushida Husin, CEO of CGC Digital. “At CGC Digital, we champion open and inclusive partnerships that go beyond platforms. By embracing innovation and collaboration, we are building a more inclusive financing ecosystem that meets the evolving needs of Malaysian MSMEs.”

Through this strategic alliance, CGC Digital and B2B Finpal are poised to make a meaningful impact on the country’s MSME financing landscape.

For more information, please visit

www.cgcdigital.com.my | www.imsme.com.my | www.b2bfinpal.com

About CGC Digital

CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, its primary goal is to empower Micro, Small, and Medium Enterprises (MSMEs) by creating a simpler and more seamless financing experience in the digital ecosystem.

For more information about CGC Digital, please visit www.cgcdigital.com.my.

About B2B Finpal

B2B Finpal is an approved peer-to-peer (P2P) financing platform registered with the Securities Commission Malaysia. Focused on serving the needs of Malaysian businesses, B2B Finpal connects creditworthy MSMEs with investors, offering fast, flexible, and transparent financing solutions to support business growth.

For more information about B2B Finpal, please visit www.b2bfinpal.com.

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I. The emerging digital banking landscape

In 2014, the first concept of a digital bank emerged in Asia’s banking industry landscape, when the Chinese government awarded licenses to Ant Group’s MyBank and Tencent’s WeBank[1]. Within the next decade, growth and adoption of digital banks spread across both developed and developing economies in the broader Asia Pacific region, beginning with two of Asia’s highly developed financial systems, Hong Kong and Singapore, followed by other countries like South Korea, Japan, Indonesia, the Philippines.

Malaysia too has begun its own journey towards digital banking adoption in recent years. In April 2022, BNM issued digital banking licenses to five qualified recipients[2] comprising different groups of companies or consortia, of which three were awarded conventional licenses and the remaining two Islamic licenses. At the time of writing, three of these consortia have already begun commercial operations, while two more licensees are due to launch their respective banks by the end of this year, in alignment with the approved commencement date set by the ministry of finance for end 2024[3].

II. Pursuing the financial inclusion agenda

As part of its licensing requirements, BNM has given its digital bank license holders a clear mandate to meaningfully address financial inclusion gaps and provide digital banking services for underserved and unserved segments that face limited or no access to traditional banking financing[4]. In fact, commitment to financial inclusion was a key cornerstone criteria used by the Central Bank to assess the best interest of applicants in its licensing framework, besides other factors such as character and integrity, nature and sufficiency of financial resources, and the soundness and feasibility of business and technology plans[5].

The requirement for these digital banks to focus on financial inclusion and address gaps in underserved and unserved segments underscores the Central Bank’s larger aspirations to create an inclusive financial system, as well as to address financial barriers faced by the unbanked to ensure that financial services are accessible and available to all segments of society.

III. What can digital banks offer?

According to BNM’s Financial Capability and Inclusion Demand Side Survey 2021-2022, Malaysians are fast adopting digitalized financial products and services, based on mobile banking, internet banking, payment card and mobile payments usage[6]. Moreover, the 2021 Global Findex report from the World Bank showed that 79% of Malaysian adults use digital payments, and this increased use was accompanied by a rise in utilization of other financial services, including savings and lendings[7].

The high take-up rate of digitalized financial services reflects a wider pattern of transformation in the banking industry, driven by innovative business models and the widespread adoption of advanced technologies to create financial access points through digital experiences. In line with this, digital banks have great potential to

provide better accessibility to financial services for those with limited access to conventional banking facilities.

As digital banks operate through digital apps and platforms, they remove traditional barriers to obtaining services, particularly for populations in remote or rural areas that may face difficulties travelling to a physical branch to access banking services. Moreover, by offering services in-app, digital banks have the potential to transform certain face-to-face banking processes, such onboarding, transactions, financing and others, to become more streamlined and simplified.

Some digital banks have also ventured into “embedded finance” (a term for integrating banking services with nonfinancial apps and services) which serves to enable application procedures to be done in a shorter, more efficient processes. By refining the user onboarding experience and simplifying the end-to-end journey for users, digital banks can thus promote better financial inclusivity, by making banking less of a hassle and more accessible for customers that may be less financially literate.

On the same note, digital banks can also harness data analytics to identify customers’ specific pain points and tailor products that can meet their needs. Often, underserved communities do not require elaborate services early in their financial journey. For example, credit-poor groups may benefit more from “bite-sized” affordable financing products, such as micro-savings, micro-financing, and micro-insurance. Such ‘simplified’ products can help to provide greater financial inclusion to underserved communities, small businesses and consumers alike.

IV. Balancing financial inclusion commitments with ensuring profitability

In meeting BNM’s mandate of serving the financially underserved, one of the primary challenges faced by digital banks is the question of whether they will be able to meaningfully do so, while staying on track to achieve sustainable growth and profitability in the long-term.

For context, BNM has imposed an asset growth cap of RM 3 billion for digital banks to prove their viability during the foundational phase, before graduating to become a full-fledged bank[8]. However, even with this relatively modest threshold, digital banks may face significant challenges in scaling growth, especially when it comes to managing risks and balancing their assets and liabilities to provide services to underserved communities.

Compared to established financial institutions that already have mature ecosystems and established expertise across core business areas, digital banks are still in the nascent stages of evolution and finding their footing in the industry. As a start, they will need a sound business plan that includes strategies to remain sustainable, while also delivering on the agenda of financial inclusion.

V. Collaborate with like-minded Fintech partners to spur financial inclusion

One strategy that digital banks can consider adopting is to work with FinTech companies that can offer relevant support to meet the financial needs of the underserved and unserved segments, which is a key criteria established by BNM. While the current digital banking landscape in Malaysia predominantly offers deposits and payments as service offerings, the next step to widening financial inclusion would be to expand into providing loans to underserved communities, since accessibility to such credit facilities is a common pain point.

As the digital arm of Credit Guarantee Corporation Malaysia Berhad (CGC), CGC Digital aims to empower MSMEs by creating a simpler and more seamless financing experience in the digital ecosystem, and help to close the funding gap for these enterprises[9]. To date, it has over three years of accumulated experience in partnering with players in the digital finance ecosystem, combining expertise and co-creating accessible digital banking solutions for the underserved and unserved segments.

One such solution involves innovating CGC’s digital guarantee product to help bridge the gap for MSMEs in accessing credit facilities, and championing the alternative credit scoring approach to complement traditional credit assessments. This is done through harnessing digital technology such as AI and machine learning tools to gather information on spending habits and financial behaviour patterns of loan applicants that may lack formal credit history[10]. The “alternative credit scoring” approach, or ACS, integrates these alternative data points into credit assessments, and has been shown to be useful in expanding access for “thin-file” applicants, as it helps to form a more complete picture of their risk profiles.

Since its inception, CGC Digital has built up a strong track record of collaborating with like-minded partners in the FinTech ecosystem to enhance financing access for MSMEs and tackle the challenges in their growth journey. A key focus of CGC Digital is the development of innovative digital guarantee products through a digital-first approach. These digital guarantee products are designed to broaden the scope of services available, specifically targeting underserved and unserved markets, thereby fostering greater financial inclusion.

CGC Digital’s commitment to bridging the financial inclusion gap for MSMEs largely mirrors the mandate of digital banks to reach more underserved segments and provide them with access to financial services. This shared vision underscores the potential of both players aligning to become partners, and supporting each other to make a broader, wide-ranging impact in financial inclusion. By joining forces with CGC Digital through strategic partnerships and collaborations, digital banks may well unlock new opportunities to co-create value and enhance their effort to expand financing access for underserved segments, driving greater inclusion within Malaysia’s digital finance ecosystem in the long term.

Commenting on the company’s potential of collaboration with digital banks, Puan Yushida Husin, CEO of CGC Digital, said, “As a digital first tech startup, we share similar digital DNA with digital banks, and are committed to partnering with MSMEs throughout their life stages to drive their excellence through digital guarantees and other targeted forms of developmental support to scale their impact. We believe that we can bring a strong value proposition to the table for digital banks, as the digital banking business aligns with our own aspirations to promote financial inclusivity for MSMEs in support of their growth and development.”

In this regard, digital banks that leverage on CGC Digital’s expertise may stand to benefit from reducing their exposure to excessive risk while taking on “thin-file” MSMEs that are generally deemed to be riskier clients.

VI. BNM endorses stakeholder partnerships, in line with strategic policy thrust to advance financial inclusion

In its second Financial Inclusion Framework (FIF) 2023-2026, BNM emphasised the importance of strategic collaborations and partnerships between financial service industry players to drive financial inclusion.

The FIF, which serves as a four-year roadmap to advance financial inclusion, sets out wide-ranging strategies aimed at achieving broad development outcomes and elevating financial resilience and well-being for all Malaysian residents. Significantly, under Policy Objective 5 of the FIF, the Bank has underscored the importance of strengthening the role and capabilities of financial institutions in promoting financial inclusion. Among the strategies laid out to achieve this include facilitating “greater partnerships, collaborations and capacity building” among stakeholders in the financial services industry, as well as ensuring a conducive policy environment “for digital banks to evolve business models to effectively deliver on financial inclusion commitments.”[11]

Complementing this, in addressing the Malaysian SME National Conference 2024, BNM Deputy Governor Jessica Chew stressed that the path forward to deliver an effective financing strategy for SMEs would need to include, among others, a focus on developing and deepening alternative sources of financing. She further stated that the entry of digital banks and alternative fundraising platforms offering “different business models and innovative approaches to credit assessments” would contribute to the expansion and diversification of funding sources” for SMEs[12].

These sentiments indicate that the Central Bank recognizes the role of digital banks as a significant driver of financial inclusion and encourages strategic partnerships with industry stakeholders that can offer innovative solutions in expanding access for the unserved and underserved segments. In this regard, collaborating with a digital-first, forward-looking FinTech such as CGC Digital, with its innovative product offerings and strong commitment to empower financially unserved and underserved MSMEs, presents promising opportunities for digital banks.

At the end of the day, tapping into innovative partners and proven solutions can be a game changer for digital banks. Such collaborations enhance their capabilities to expand banking services to the underserved and unserved segments, while also aligning with the goal to become sustainable and thrive in the long run.

References:

1.  Frances Gagua, “Did Digital Banks Fail to Disrupt?,” Asian Business Review, March 28, 2023, https://asianbusinessreview.com/banking-technology/exclusive/did-digital-banks-fail-disrupt.
2. The five consortiums were Boost Holdings Sdn Bhd and RHB Bank Bhd; GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd; Sea Limited and YTL Digital Capital Sdn Bhd; AEON Financial Service Co, Ltd, AEON Credit Service (M) Bhd and MoneyLion Inc; and KAF Investment Bank Sdn Bhd.
3. GXBank was the first to launch in the market in the final quarter of 2023, by a consortium made up of Grab-linked GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd. Following this, two other digital banks opened its doors to the public in June: AEON Bank, a subsidiary of AEON Financial Service Co, Ltd; and Boost Bank, a joint venture between Boost Holdings Sdn Bhd and RHB Bank Bhd. The remaining two digital banking applicants that have yet to launch their digital banks are a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd and a consortium led by KAF Investment Bank Sdn Bhd.
4. BNM, “Financial Inclusion Framework 2023-2026 Strategy Paper,” June 23, 2023, https://www.bnm.gov.my/documents/20124/55792/SP-2nd-fin-incl-framework.pdf.
5. “Five Successful Applicants for the Digital Bank Licences – Bank Negara Malaysia,” accessed June 27, 2024, https://www.bnm.gov.my/-/digital-bank-5-licences.
6. “Financial Stability Review First Half 2022,” 2022.
7. “The Global Findex Database 2021,” Text/HTML, World Bank, accessed November 1, 2024, https://www.worldbank.org/en/publication/globalfindex.
8. BNM, “Licensing Framework for Digital Banks,” December 31, 2020, https://www.bnm.gov.my/documents/20124/938039/20201231_Licensing%20Framework%20for%20Digital%20Banks.pdf.
9. “CGC Digital: Making Finance Inclusive and Accessible for MSMEs,” CGC Digital, accessed November 21, 2023, .
10. With their data driven approach, digital banks can assess financial transactions using non-traditional data sources such as payments, payroll and point of sale terminals on digital platforms. Data obtained from these digital transactions (sometimes called ‘digital footprints’) can be applied to alternative credit scoring frameworks to complement traditional credit scores, and create a more holistic picture of creditworthiness.
11. Bank Negara Malaysia, “Financial Inclusion Framework 2023-2026,” June 23, 2023, https://www.bnm.gov.my/documents/20124/55792/SP-2nd-fin-incl-framework.pdf.
12. “Deputy Governor’s Keynote Address at the Malaysian SME National Conference – Bank Negara Malaysia,” accessed June 27, 2024, https://www.bnm.gov.my/-/dgjc-spch-smenc24.

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KUALA LUMPUR, 20 MARCH 2025 – Boost Bank, the nation’s first homegrown digital bank has partnered with CGC Digital, a fintech subsidiary of Credit Guarantee Corporation Malaysia Berhad (“CGC”) to enhance support for eligible underserved Micro, Small, and Medium Enterprises (MSMEs) across Malaysia. Under this partnership, a total of RM130 million has been earmarked for Boost Bank’s financing solutions – Term Loan facility and Revolving Credit facility. 

CGC Digital will provide CGC’s guarantee cover through bundling with Boost Bank’s MSME financing solutions to further strengthen MSME access to finance. This offering aims to reach out to thousands of MSMEs and bridge the critical financing gap these businesses face, while enabling businesses to enhance operations and capitalise on growth opportunities. 

Boost Bank’s Term Loan financing offers MSMEs a convenient application process with minimal documentation required for loan amounts from RM50,000. The facility features a financing tenure of up to 36 months with no early settlement fees, facilitating effective cash flow management by MSME borrowers. Businesses can also enjoy flexible repayment options to be more in sync with their cash flow needs without incurring any penalty. 

The Revolving Credit financing offers MSMEs flexibility to manage their cash flow and rise to business opportunities with ease with its swift financing disbursement feature, which enables businesses to receive funds in as fast as two working days upon approval of the loan. 

Fozia Amanulla, CEO of Boost Bank, shared, “At Boost Bank, we understand the unique needs of MSMEs and the critical role financing plays in their growth. In line with our mission to drive financial inclusion and growth for underserved communities, we are committed to providing a platform that opens doors to growth, empowering businesses to overcome challenges and achieve success. This partnership with CGC Digital strengthens our ability to offer seamless, fast, and accessible financing solutions, empowering MSMEs to overcome challenges and seize growth opportunities. We will continue to innovate transformative offerings that will elevate the MSME landscape in Malaysia.”

“Boost Bank is our first digital bank partner, marking a significant milestone in our journey towards facilitating access to financing with digital-first partners. By collaborating with Boost Bank, we can offer seamless, efficient, and accessible financial products that cater to the unique needs of MSMEs,” said Yushida Husin, CEO of CGC Digital. “This partnership is a significant step forward in our mission to support underserved MSMEs by providing them with the financing they need to succeed. It also aligns perfectly with the purpose for which CGC Digital was established—collaborating with digital-first partners. We are excited about the potential this partnership holds and are eager to explore further collaborations with other digital-first players in the industry. Our goal is to continuously enhance our offerings, ensuring that we remain at the forefront of financial innovation.”

Boost Bank and CGC Digital are committed to addressing the needs of underserved MSMEs and promoting financial inclusion while ensuring MSMEs receive the support they need to thrive in today’s economy.

To learn more about Boost Bank, please visit www.myboostbank.co. For more information about CGC Digital, please visit www.cgcdigital.com.my. 

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Addressing Food Security in Malaysia

Food security remains a critical concern for Malaysia as the nation grapples with challenges such as climate change, urbanization, a growing population and reliance on imported food. Despite the importance and urgency to address food insecurity issues, MSMEs in agriculture sector face significant hurdles in securing financing to grow their businesses and to enhance productivity. Many small-scale farmers lack the necessary collateral to secure traditional loans, which further limits their access to financial resources. A gap in financial literacy among farmers also hinders their ability to navigate complex financing options effectively. Furthermore, agriculture segment is often perceived as a high-risk sector due to its vulnerability to climate change and market volatility, making financial institutions hesitant to extend credit.

Potential Impact on Local Farmers

The collaboration between CGC Digital, Funding Societies, and FarmByte aims to have positive impact on local farmers. By providing innovative financing options, local farmers will have better access to the capital needed for sustainable operations and business expansion. Improved financial literacy and access to modern agricultural technologies will enhance farmers’ productivity and efficiency. Implementing risk assessment and management strategies will help farmers manage uncertainties related to climate change and market fluctuations. The focus on sustainability will ensure that farming practices are environmentally friendly and economically viable in the long term. By addressing the financial challenges faced by farmers, this collaboration will empower them to become more resilient and self-sufficient.

Yushida Husin, Chief Executive Officer of CGC Digital said, “At CGC Digital, we are deeply committed to supporting initiatives that address the critical issue of food security in Malaysia. By collaborating with Funding Societies and FarmByte, we aim to close the funding gap and enable local farmers with financial access they need to thrive. We believe that leveraging farming data as an alternative credit scoring metric will not only enhance the accuracy of credit assessments but also provide a more inclusive and supportive financial ecosystem for our agricultural MSMEs. This collaboration is a significant step towards building a resilient and sustainable agricultural sector that can meet the growing demands of our nation.”

Wong Kah Meng, Group Chief Operating Officer and Chief Executive Officer of Funding Societies Malaysia remarked, “This partnership with CGC Digital reflects our shared commitment to empowering underserved businesses across Malaysia. We strive to build a more inclusive financing ecosystem that fuels the growth of micro and small enterprises. By integrating CGC Digital’s expertise in credit enhancement with Funding Societies’ advanced digital financing platform, on the back of FarmByte’s agricultural ecosystem, we aim to empower farmers and agribusinesses with greater access to capital that they need to expand, create jobs, and drive economic progress. This collaboration not only strengthens the agricultural value chain but contributes to food security and economic resilience in Malaysia.”

According to Syed Aiman Kifli Syed Jaafar, Chief Executive Officer of FarmByte, the partnership with CGC Digital and Funding Societies aligns with the company’s vision to revolutionize farming by providing farmers with both financial and technological resources. “Our goal is to empower MSMEs in the agriculture sector with greater access to financing, enabling them to scale their businesses and enhance productivity,” he shared. “Through this collaboration, we are bridging the financial gap and equipping agropreneurs with the resources and support needed to drive a more resilient and sustainable agrofood ecosystem.”

A Collaborative Approach to Empower MSMEs

Through this MoU CGC Digital, Funding Societies, and FarmByte will leverage their combined expertise to implement innovative financing solutions that address the unique needs of MSMEs in the agriculture sector. CGC Digital will play the key role of mitigating risks as a leading credit guarantee provider and enhance its probability of default model with farm-level data as an alternative risk measurement for agribusinesses, thereby de-risking lending and improve access to financing through data-driven credit evaluations.  Funding Societies, will provide fast, flexible funding solutions utilizing alternative credit assessments to serve underserved farmers and agribusinesses that may lack traditional collateral. FarmByte, will contribute farm-level data and insights to enhance credit scoring models, improving risk evaluation and financial inclusion.

About FarmByte

FarmByte is pioneering a new era in Malaysia’s agrofood industry through innovative technology and data-driven solutions. As a subsidiary of Johor Corporation (JCorp), FarmByte is committed to enhancing national food security, improving production efficiency, and uplifting the livelihoods of farmers across Malaysia.

For more information, please visit: www.farmbyte.com

About CGC Digital

CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, its primary goal is to empower Micro, Small, and Medium Enterprises (MSMEs) by creating a simpler and more seamless financing experience in the digital ecosystem.

For more information about CGC Digital, please visit www.cgcdigital.com.my

About Funding Societies | Modalku

Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia. It is licensed in Singapore, Indonesia, Thailand, registered in Malaysia, and operates in Vietnam. The FinTech company provides US$1 billion annually of business financing to small and medium-sized enterprises (SMEs). In recent years, it has made strategic milestones including its acquisition of regional digital payments platform CardUp and co-investment into Bank Index in Indonesia.

Funding Societies | Modalku is backed by SoftBank Vision Fund 2, Maybank, Khazanah Nasional Berhad, CGC Digital (the digital arm of the Credit Guarantee Corporation Malaysia Berhad), SBVA (previously SoftBank Ventures Asia), Peak XV Partners (previously Sequoia Capital India), Alpha JWC Ventures, SMBC Bank, BRI Ventures, VNG Corporation, Rapyd Ventures, Endeavor, EBDI, SGInnovative, Qualgro, and Golden Gate Ventures among others.

It has received accolades through the years including: Brands for Good (2019, 2023), Global SME Excellence Award, Global SME Finance Awards by IFC (2021-2023) Global Startup Awards (2020), MAS FinTech Award (2016, 2021), Singapore’s Fastest-Growing Companies 2024 (a list of 100 companies compiled by The Straits Times and Statista), High-Growth Companies in Asia-Pacific 2024 (a list of 500 companies compiled by the Financial Times and Statista) .

For more information, please visit: www.fundingsocieties.com.my

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