MSMEs Archives - CGC Digital

Unlocking MSME Growth Through Digital Marketplace

CGC Editor — Thu, 21 May 2026 05:18:02 +0000

by Chin Sze Yuen, Head, Partnership & Marketing from CGC Digital

Malaysia’s Micro, Small, Medium Enterprises (MSMEs) remain the backbone of Malaysia’s economic growth, innovation and employment. Yet as the financial ecosystem expands, the primary challenge has evolved. It is no longer a lack of financing, but fragmented access to it. While support is widely available across banks, fintech platforms, government agencies and advisory programmes, MSMEs often face a lack of clarity in navigating these options, resulting in uncertainty over where to begin and how to proceed.

This fragmentation extends beyond access points into how MSMEs operate. Sales, customer engagement and financial records are frequently distributed across multiple digital platforms, creating high levels of activity but limited coherence. Without a structured and consolidated business profile, even viable enterprises struggle to translate operational performance into credible financial evidence. This, in turn, affects financing outcomes, as financial institutions rely on clear visibility of revenue, records, and risk indicators when assessing applications.
Not only that, the underlying issue is therefore not capability, but confidence. MSMEs demonstrate strong market demand and growth potential, while financiers evaluate readiness through structured data and risk frameworks. Bridging this divide requires more than expanding funding availability. It requires strengthening how MSMEs present their businesses, ensuring they are easier to understand, assess and ultimately support.

At the recent Kre8tif East! Sabah 2026 hosted by Sabah Creative Economy and Innovation Centre (SCENIC) and supported by Malaysia Digital Economy Corporation (MDEC), CGC Digital shared that financing should not be viewed as the starting point of growth, but as the outcome of readiness. Sustainable business expansion depends on enterprises being visible, structured, traceable, protected, and prepared. This reframes the conversation from seeking financing alone to building the foundational capabilities that enable access to it.

In this context, digital marketplaces are emerging as critical enablers. Rather than functioning as standalone directories, they are evolving into integrated ecosystems that consolidate access to financing, knowledge, and business support. By unifying fragmented information into a structured journey, these platforms help MSMEs transition from complexity to clarity and from disconnected activity to guided progression.

“Digital marketplaces are evolving into key connectors within the MSME ecosystem, integrating financing, knowledge and support in a more holistic way,” said Chin Sze Yuen, Head of Partnerships and Marketing at CGC Digital. “As MSMEs continue to adopt digital solutions, the emphasis is shifting towards improving accessibility, enhancing clarity and enabling more confident decision-making for long-term growth.”
In response to these evolving needs, CGC Digital developed imSME, Malaysia’s first online MSME financing referral platform. Serving as a single-entry point, imSME connects businesses to more than 90 financing products across financial institutions and alternative financiers, enabling a structured process of discovery, matching and application. The platform also provides advisory support for unsuccessful applications, helping MSMEs identify gaps and strengthen readiness for future opportunities.

The impact of this integrated approach is evident. Since its launch, imSME has attracted over 3.18 million visitors, supported more than 143,600 MSMEs and facilitated RM628.6 million in approved financing. More importantly, it has transformed the financing journey from fragmented exploration into structured access, enabling MSMEs to make more informed decisions while strengthening overall business readiness.
By combining financing access with advisory support and ecosystem partnerships, CGC Digital is addressing not only the financing gap, but also the broader capability and readiness gaps that underpin sustainable MSME growth. This reflects a wider shift from product-centric solutions towards a journey-led model that supports businesses from early structuring through to expansion and scale.

As Malaysia’s MSME ecosystem continues to evolve, integrated digital financing platforms will play an increasingly important role in strengthening financial inclusion and economic resilience. By transforming fragmented access into structured and guided pathways, these ecosystems enable MSMEs to build confidence, improve readiness, and unlock sustainable growth at scale.

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GXBank Expands MSME Financing with CGC Digital and Alternative Data Adoption

CGC Editor — Mon, 18 May 2026 09:16:04 +0000

PETALING JAYA, 18 May 2025 – GX Bank Berhad (GXBank) has enhanced its GX Business Banking suite, offering MSMEs a more flexible path to digital banking and financing. Supported by CGC Digital (the fintech arm of Credit Guarantee Corporation Malaysia), the Bank can offer higher financing limits of up to RM150,000. Additionally, GXBank also accepts personal bank statements for business account applications and credit assessments. These updates enable sole proprietors to build a verifiable business credit history while addressing Malaysia’s RM90 billion MSME credit gap¹.

“Sole proprietors are the lifeblood of Malaysia’s economy, yet remain underserved. Since the launch of GX Business Banking, our data-driven underwriting has led to over a thousand GX FlexiLoan users and approximately 70% loan usage rate across our business banking portfolio,” says Kaushik Chowdhury, CEO of GXBank. “In just 30 days, our partnership with CGC Digital has seen over RM3.3 million in loan approvals – bridging the credit history gap through alternative data and digital guarantees. We are now further lowering barriers by accepting personal bank statements as income verification to help more entrepreneurs scale.”

Tailored Support – The CGC Digital Partnership

The collaboration with CGC Digital introduces a digital-first guarantee that serves as the structural backbone for higher approved limits. With more than half of customers opting-in organically, this high early adoption rate underscores the clear demand for scalable credit as MSMEs move beyond micro-financing towards business expansion.

“The future of MSME financing will not be built on collateral alone, it will be shaped by how effectively we understand businesses in the digital economy,” says Yushida Husin, CEO of CGC Digital. “This collaboration with GXBank reflects our commitment to advancing more inclusive and forward-looking financing models. By integrating guarantee support within digital banking ecosystems, we are enabling financial institutions to serve segments that have traditionally been underserved, while giving MSMEs a more equitable pathway to access growth capital.”

Reducing Barrier to Entry via Personal Bank Statements

Complementing the partnership, GXBank now accepts personal bank statements for both business account registration and loan application. This move acknowledges the reality for the 70% of sole proprietors within the region who currently manage business expenses through personal accounts².

This feature serves as a transition tool, moving entrepreneurs away from the complexities of commingled personal and business finances. By providing a direct path to a formal business operating account, GXBank enables independent businesses to leverage their personal track record into a verifiable business credit history.

About GX Business Banking

Since its launch in Q4 2025, GX Business Banking has become the operational foundation for a diverse range of Malaysian entrepreneurs – primarily across the retail, food & beverage, and manufacturing sectors. The product is a partner in the growth journey, with seamless digital onboarding offering 2.5% p.a. daily interest on business deposits with zero monthly fees. By providing a revolving credit line – where interest is only paid on the amount utilised – the Bank ensures that capital remains a tool for expansion. Through these enhancements, GXBank continues to ensure the ~40% GDP contribution of MSMEs becomes a launchpad for national prosperity.

For more information on GX Business banking, click HERE.

About CGC Digital

CGC Digital is a FinTech company, established as the digital arm of Credit Guarantee Corporation Malaysia Berhad. Registered in July 2022, our 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 GXBank

GX Bank Berhad (GXBank) is a member of Perbadanan Insurans Deposit Malaysia. Regulated by Bank Negara Malaysia and protected by PIDM up to RM250,000 for each depositor – GXBank is Malaysia’s first digital bank now serving over a million Malaysians. With a majority-Malaysian workforce from the finance and technology sectors, the bank aims to disrupt the current banking industry with customised innovative solutions that empower Malaysians to be financially resilient and support their financial goals.

GXBank is a subsidiary of GXS Bank Pte. Ltd., the digital bank joint venture between Grab Holdings Limited and Singapore Telecommunications Limited (Singtel). GXBank is also owned by a consortium of other Malaysian investors, including Kuok Group.

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Financing: Solving the gig credit conundrum

CGC Editor — Mon, 11 May 2026 08:58:07 +0000

By Vanessa Gomes

This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 11, 2026 – May 17, 2026

Link to article: Financing: Solving the gig credit conundrum

For the 1.2 million gig workers in Malaysia, social mobility remains a challenge, especially since this group lacks visibility in the eyes of traditional financial institutions. Without regular pay slips or a predictable income stream, the “probability of default” models used by commercial banks often flag gig workers as high risk, regardless of their actual earnings.

Parliament passed the Gig Workers Act 2025, which came into full effect on March 31 this year, mandating that gig workers have the right to request and receive pay slips or income statements from hiring entities.

While the act is a first step towards formalising the gig segment, CGC Digital Sdn Bhd, the digital arm of Credit Guarantee Corp Malaysia Bhd (CGC), says it is working to build a more cohesive financial ecosystem for the growing gig workforce.

CGC Digital’s strategy centres on closing the gap in how financiers understand new earning models. Last year, it launched imGIG, a platform that targets three recurring challenges faced by gig workers — irregular income, lack of financial protection and difficulty accessing finance.

Sign-ups came in quickly, pointing to a workforce that is digitally savvy but underserved in key areas of support. While delivery riders make up a large share of the registrants, the data also show a significant number of contract-based professionals in IT and professional services.

“Over the past few years, as we see this segment grow … there really is limited institutional understanding in terms of how this segment actually earns, manages cash flow and interacts with financial services,” explains CEO Yushida Husin, adding that imGIG was designed to understand work patterns and financial behaviours at the ecosystem level.

“Hence, when we want to curate products, it’s really a different journey because the ‘rider’ persona is very much different from the professional services and IT services persona,” she says.

CGC is 78.65% owned by Bank Negara Malaysia and 21.35% by commercial banks in the country. Its fintech arm, CGC Digital, is mandated to support micro, small and medium enterprises (MSMEs) and gig workers through digital solutions. Its stated goal is bankability, as the lack of a banking history or a stable employment record has kept gig workers invisible to financiers.

“In the past, pay slips were basically a proxy to your income and your outflow. In the gig world, this proxy is broken,” says Yushida.

“We want to provide digital solutions that will benefit this segment, whether it is from an educational or financial literacy angle. When the data and credit assessment is possible and makes sense [to service this segment], we will work with financiers to provide financing for them. It’s just the starting point for us.”

To address the gap, CGC Digital is turning to alternative data — transaction volumes, sales records and utility data — to build a more accurate picture of a worker’s financial health. Yushida says CGC Digital currently works with a range of financiers, from banks to fintech companies, and is improving collaboration between them to offer solutions to gig workers.

The challenge, she says, is that different platforms and gig workers operate differently, and catering to this diversity requires deeper understanding.

“Some gig workers are okay where they are but some open their own companies and have their own structures within it. And interestingly, professional services form quite a major segment, not just riders. So, in terms of documentation, for example, how do you communicate it to the worker?”

CGC Digital plans to roll out a minimum viable product this year and is still shaping it based on feedback from its platform partners. Yushida says the company is in talks with several platform operators that are working on financial solutions for gig workers.

“The industry needs an outfit that can connect the dots, so we thought that we could get the ball rolling through collaboration and integrating multiple parts of the ecosystem, which includes working with players, financiers and others in the system,” she says.

“To nail down what the solution is, we are working with partners but it’s a phased approach. Definitely by this year, we want to see something that is meaningful for those who have registered. I cannot solve the whole thing on my own because everybody holds different parts of the puzzle.”

Technology, enables better financial products and solutions

Yushida says there are data points within gig platforms that can be used to curate a worker’s and a business’ financial profile, such as transaction volume and sales. Essentially, from a financial perspective, it takes more than a single data point to prove a person’s creditworthiness.

“Some fintech players are testing the viability of other data points, like platform data and utility data. The credit assessment to determine the creditworthiness of gig workers is still quite challenging, even for ourselves, when we work with financiers as the guarantee front,” she says.

Technology is central to that effort. Yushida says artificial intelligence (AI) and machine learning (ML) are needed to interpret the large volume of “thin-file” data points generated by gig activities, with patterns analysed to support modelling.

“Probability of default is important but, to get to that, AI and machine learning are very important to come up with a model that works,” she explains.

“For the riders, one model might fit. For the drivers, another model might fit. This is where we need to make sense of the data and develop models using different statistical techniques.”

With model governance, bias monitoring and explainability controls in place, CGC Digital aims to shorten the data-sifting process and develop standardised algorithms to use with financing partners.

For now, Yushida says the path ahead is not fixed as CGC Digital will be working with different ecosystem partners that must cater to different needs.

Gig Workers Act a good first step, but more needed to support financing

While some views the Gig Workers Act 2025 as the final answer to worker protection, Yushida sees it as a starting point and a useful proxy for financial discipline. She says the act’s provision on the right to request a pay slip is particularly significant for credit assessment.

“Pay slips are a good start because that gives financiers a clearer, more consistent starting point,” Yushida notes. However, she adds that it will not be the sole factor in determining credit worthiness and financiers will still look at income patterns and commitments over time.

Similarly, the mandatory Social Security Organisation (Socso) contributions under the act provide a new data point.

“Socso participation shows a worker’s financial discipline and also the consistency of their payments. This also allows industry players like CGC Digital to build the financial muscle needed for long-term sustainability,” she explains.

CGC Digital does not plan to compete with platform operators such as Grab or Lalamove, Yushida says. Instead, it sees its role as coordinating across the ecosystem. “I cannot solve the whole ecosystem because everybody holds different parts of the puzzle. The company’s role is to connect the dots between fintech players, financiers and the gig platforms themselves.”

One of the most complex challenges in this orchestration is data, specifically data portability, security and consent. For an ecosystem to work, a worker’s data must be able to move securely from a delivery platform to a credit assessment tool and finally to a bank, all while remaining compliant with the Personal Data Protection Act (PDPA) and Bank Negara Malaysia’s Risk Management in Technology (RMIT) standards.

“The data owner must [give consent] before [the data is transferred] from one institution to another,” Yushida says.

Yushida also points to the concept of a gig identity, which is a centralised, portable digital profile that lets a worker carry their credit reputation from one platform to another.

As CGC Digital prepares to roll out its products this year, Yushida says the younger generation is already moving away from the “one employer for life” model, choosing instead to “work for a few masters” across multiple digital outfits.

“Now is the time to actually crack the code. The gig economy is no longer a peripheral side hustle but a major pillar of the future Malaysian economy,” she says.

CGC Digital says it is combining the new legal framework under the Gig Workers Act with AI-based credit assessment in a bid to ensure that workers who choose flexibility are not cut off from financial services.

“At least, we’re moving somewhere,” Yushida says.

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Penang Nasi Campur Entrepreneur Grows Her Business with imSME by CGC Digital

CGC Editor — Thu, 16 Apr 2026 02:21:51 +0000

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.

Nasi Campur Kak Iza has grown over the years from the goal of serving the community.

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, 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.

Customers flocking to Nasi Campur Kak Iza.

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.

The winners of the imSME Umrah Campaign 2025.

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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CapBay and CGC Digital Bridge the MSME Financing Gap with First Dual-Facility Guarantee Scheme Rollout

CGC Editor — Mon, 13 Apr 2026 06:58:52 +0000

KUALA LUMPUR, 8 APRIL 2026 – Bay Smart Capital Ventures Sdn. Bhd. (CapBay), a leading Malaysian fintech company providing a Supply Chain Finance and Peer-to-Peer (P2P) financing platform, together with CGC Digital Sdn. Bhd., a wholly-owned subsidiary and the digital arm of CGC Malaysia that provides credit guarantee services through an innovative ecosystem, have announced a strategic partnership to launch a new Digital Guarantee Scheme designed to provide robust capital support to unserved and underserved Micro, Small, and Medium Enterprises (MSMEs) in Malaysia.

At its core, CGC Digital provides innovative guarantees that act as powerful risk mitigants. Through a strategic risk-sharing mechanism, this collaboration directly benefits MSMEs by lowering the financing costs through more competitive rates and empowering those lacking traditional collateral to secure essential funding. Complementing this, CapBay utilises proprietary AI-driven credit assessments to drastically reduce evaluation times, delivering capital to local MSMEs with unprecedented speed. This synergy creates a transformative ecosystem for local businesses. Notably, it marks the scheme’s first dual-facility rollout, offering both Islamic and Conventional avenues to ensure comprehensive market inclusion, leaving no viable enterprise behind.

Building on CapBay’s proven record of facilitating over RM5.4 billion for more than 2,500 SMEs, this collaboration unlocks capital from new institutional and retail investors on CapBay’s P2P platform. Backed by CGC Digital’s guarantee, this added assurance enhances the credit profile of underserved MSMEs, enabling access to financing that may otherwise be out of reach. By facilitating more inclusive risk-sharing, this partnership encourages greater participation from financing partners while supporting more favourable terms, including a reduced interest rate ceiling, effectively advancing CGC Digital’s mandate to expand financial accessibility. This rollout targets businesses with at least 51% Malaysian ownership, offering flexible capital from RM50,000 to RM500,000 with tenures of up to 60 months to drive operational growth.

“We are proud to partner with CGC Digital to make capital widely accessible to SMEs hindered by the lengthy approval processes of traditional avenues. By leveraging CapBay’s AI-driven credit assessment, we can offer seamless, rapid digital financing to serve the ‘missing middle’, viable enterprises that are often overlooked. Backed by CGC Digital’s guarantee, this strategic allocation represents our shared commitment to injecting vital liquidity into the MSME landscape so grassroots businesses can thrive in a modern economy,” said Ang Xing Xian, Co-Founder and CEO of CapBay.

From left to right: Mr. Ang Xing Xian, Co-founder and Group CEO, CapBay and Ms. Yushida Husin, CEO, CGC Digital

Yushida Husin, CEO of CGC Digital, added, “CGC Digital is committed to innovation that drives financial inclusion. Our collaboration with CapBay enables us to leverage data-driven insights to more effectively bridge the financing gap for MSMEs. By offering a guarantee scheme that accommodates both Shariah-compliant and conventional needs, we are not only providing a safety net for financiers but also opening doors for small businesses to scale. This initiative aligns with our mandate to empower the underserved with the financial tools necessary for sustainable growth.”

In line with their shared vision, CapBay and CGC Digital see this collaboration as a catalyst for a more equitable economic landscape, directly supporting the aspirations of the MADANI Economy framework and the 13th Malaysia Plan (RMK13). By combining innovative fintech solutions with reliable credit guarantees, both parties are committed to overcoming funding barriers, driving the digital transformation of the broader MSME landscape, and building a resilient, sustainable, and globally competitive sector.

About CGC Digital

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

About CapBay

CapBay is an award-winning Multi-Bank Supply Chain Finance and Peer-to-Peer (P2P) Financing platform that enables SMEs to unlock cash flow trapped in their supply chains through innovative financing solutions. Using a proprietary credit-decisioning model, CapBay connects businesses of all sizes to banks and investors, facilitating access to high-quality financing opportunities. The company is regulated by the Securities Commission Malaysia (SC).

Since its launch in 2017, CapBay Group has disbursed over RM5.4 billion through more than 40,000 financing notes, supporting over 2,500 SMEs. Recognized as a leader in Supply Chain Finance, CapBay has been named among CNBC and Statista’s World’s Top Fintech Companies (2023–2025), Fortune’s Fintech Innovators Asia 2024, and the FT High-Growth Companies Asia-Pacific (2024–2025).

CapBay has also received multiple industry awards, including The Asset Triple A Sustainable Finance Awards 2026 for Best Social Loan (SME) in partnership with HSBC, The Asset Triple A Digital Awards for Fintech Startup of the Year, and The Asian Banker’s recognition as the Best Fintech Platform – Digital Supply Chain Finance in Asia-Pacific.

For more information, visit www.capbay.com.

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Digital banks and the role of strategic partnerships in delivering financial inclusion for the underserved

CGC Editor — Mon, 31 Mar 2025 06:33:43 +0000

As part of their licensing requirements, digital banks in Malaysia are expected to offer banking services to unbanked and underserved segments to promote financial inclusion. Partnering with like-minded fintechs that are working on innovative solutions to complement financial inclusion could be a significant game changer in enabling these banks to meet their mandate, while staying on track to achieve long-term sustainability.

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:

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.
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.
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.
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.
“Five Successful Applicants for the Digital Bank Licences – Bank Negara Malaysia,” accessed June 27, 2024, https://www.bnm.gov.my/-/digital-bank-5-licences.
“Financial Stability Review First Half 2022,” 2022.
“The Global Findex Database 2021,” Text/HTML, World Bank, accessed November 1, 2024, https://www.worldbank.org/en/publication/globalfindex.
BNM, “Licensing Framework for Digital Banks,” December 31, 2020, https://www.bnm.gov.my/documents/20124/938039/20201231_Licensing%20Framework%20for%20Digital%20Banks.pdf.
“CGC Digital: Making Finance Inclusive and Accessible for MSMEs,” CGC Digital, accessed November 21, 2023, .
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.
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.
“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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Boost Bank and CGC Digital Partner To Financially Empower MSMEs with RM130 Million Funding

CGC Editor — Mon, 24 Mar 2025 05:12:29 +0000

RM130 million allocated to Boost Bank’s financing solutions – Term Loan and Revolving Credit facilities which offer fast, flexible, accessible financing
CGC Digital will offer CGC’s Guarantee Cover and develop digital guarantee products in tandem with Boost Bank’s MSME financing solutions
Thousands of MSMEs across Malaysia to benefit from tailored financing solutions, with more innovations in the pipeline

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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Khazanah Nasional Berhad and CGC Digital announce strategic investment in Funding Societies to broaden financing access to MSMEs

CGC Editor — Thu, 04 Jan 2024 03:47:08 +0000

Kuala Lumpur, Malaysia, 3 January 2024 – Khazanah Nasional Berhad (“Khazanah”) and CGC Digital Sdn Bhd (“CGC Digital”) announced an investment into the largest unified small and medium enterprise digital finance platform in Southeast Asia, Funding Societies | Modalku (“Funding Societies”), to broaden financing access to unserved and underserved businesses.

Funding Societies is a regional financial technology (“FinTech”) company that provides financing to micro, small and medium enterprises (“MSMEs”), especially micro and small businesses currently unserved by existing financial institutions. Since its inception, Funding Societies has disbursed over US$3.5 billion (RM16 billion)[1] in business financing through five (5) million transactions, positively impacting over 100,000 businesses across its five (5) markets in Southeast Asia, namely Malaysia, Singapore, Indonesia, Thailand and Vietnam.

In the context of Malaysia, Funding Societies aims to address the RM90 billion [1] (US$19 billion) funding gap for MSMEs. Established in 2015, Funding Societies was one of the first companies to be registered as a Recognised Market Operator by the Securities Commission Malaysia.

With this investment, Funding Societies aims to expand its Malaysian coverage to areas beyond Kuala Lumpur, Selangor, Penang, and Johor. By the end of 2025, it targets to serve more than 25,000 MSMEs across Malaysia, thereby improving MSME’s access to financing, growth, and scalability while fostering job creation and income development for those employed by these businesses.

Moreover, the company intends to widen the reach of its Islamic financing solutions introduced in Malaysia earlier this year. Since its launch in May 2023, it has disbursed over RM100 million in Shariah-compliant financing in Malaysia.

Khazanah’s investment falls under its Dana Impak mandate, a fundamental pillar under its Advancing Malaysia strategy. The investment complements the government’s aspiration of enhancing MSMEs’ performance through greater access to financing, creating opportunities and promoting socioeconomic growth for rural, semi-urban and underserved communities with limited access to financial services.

In order to create a greater impact on the Malaysian MSME ecosystem, Khazanah’s investment in Funding Societies is made alongside CGC Digital. CGC Digital aims to advance financial inclusion through the development of innovative digital guarantee products as well as its own guarantee credit scoring model that can close the gap and address the pain points in micro and small businesses’ demand for financing. These nation-building initiatives target to level the playing field for MSMEs, especially thin-file MSMEs. To reinforce the partnership, Funding Societies will continue to collaborate with CGC Digital to provide digital guarantee products on its platform, which will further aid Malaysian micro and small businesses in getting financing in the long term. A digital-first approach through its digital guarantee product leveraging alternative data will allow micro and small businesses broader and more affordable access to financing.

Khazanah’s Managing Director, Dato’ Amirul Feisal Wan Zahir, said, “The investment in Funding Societies reflects our commitment to fostering financial inclusion and bridging the funding gap, especially within the MSME community. Being the backbone of Malaysia’s economy and contributing nearly half of the nation’s employment, MSMEs are both critical and critically underserved. Hence, this investment aligns with our mission of contributing to nationbuilding and socioeconomic growth”.

Feisal added that by supporting innovative platforms like Funding Societies together with CGC Digital, Khazanah aims to empower the MSME community, unlocking new opportunities to propel the nation in line with the MADANI Economy vision of improving socioeconomic outcomes for all.

Khazanah’s impact thesis was driven by the role of digital finance platforms, such as Funding Societies, in leading the delivery of comprehensive digital financing solutions to underserved MSMEs in Southeast Asia, enabling improved access to capital and fostering financial inclusion throughout the region.

Particularly for the Malaysian market, with Dana Impak’s investment, Funding Societies aims to have more than 50% of its annual loan disbursements from Shariah-compliant financing by 2025 – in line with the aspiration to support the growth of Bumiputera MSMEs.

Yushida Husin, CEO of CGC Digital, said, “CGC Digital sees this investment as a strategic win for Malaysian MSMEs. We share Dana Impak’s vision and believe that, by working together with Khazanah, CGC Digital can advance financial inclusion among underserved and unserved MSMEs in the digital ecosystem. CGC Digital seeks to push the envelope by developing a suite of innovative digital guarantee products for thin-file MSMEs that can be offered together with Funding Societies’ financing products to increase their chance of obtaining much-needed financing.”

The investment also follows the success of CGC Digital’s partnership with Funding Societies earlier this year, where a new guarantee product was developed via a pilot programme. The product provides Credit Guarantee Corporation Malaysia Berhad’s guarantee at the transactional level of Funding Societies’ digital supply chain financing, thereby directly supporting the business activities of MSMEs and advancing financial inclusion.

Datuk Mohd Zamree Mohd Ishak, Board Member of CGC Digital and the President and CEO of CGC Digital’s parent company, Credit Guarantee Corporation Malaysia Berhad, echoed the sentiment, saying, “By joining forces with Khazanah and Funding Societies, this strategic investment by CGC Digital shows CGC Group’s commitment to taking Malaysian MSMEs, especially thin-file MSMEs, to the next level.”

Co-founder and Group CEO of Funding Societies, Kelvin Teo, said, “We are honoured to receive support from Khazanah and CGC Digital, who share our conviction to impact and MSMEs. This is a testament to our commitment towards extending credit to reach more underserved MSMEs. We would also progressively offer MSMEs more cash flow management solutions to power their growth.”

He added that while MSMEs represent 97% of business establishments in Malaysia and contribute 38% to the gross domestic product (GDP)[2], this group still faces significant challenges in obtaining credit, as evidenced by the RM90 billion financing gap in Malaysia[3].

“This is where Funding Societies seeks to step in by serving the region’s MSMEs’ cash management challenges and needs with our extensive reach and broad range of short-term financing solutions,” Teo added.

About Khazanah Nasional Berhad

Khazanah is the sovereign wealth fund of Malaysia entrusted to deliver sustainable value for Malaysians. In line with its long-term strategy of Advancing Malaysia, Khazanah aims to deliver its purpose by investing in catalytic sectors, creating value through active stewardship, increasing its global presence, as well as building capacity and vibrant communities for the benefit of Malaysians.

For more information on Khazanah, visit www.khazanah.com.my.

About Dana Impak

Dana Impak, or impact fund, is an initiative by Khazanah and a key pillar under Khazanah’s Advancing Malaysia strategy to support investments that will increase the nation’s competitiveness and resilience in the evolving global environment, prioritising the creation of long-term societal value for Malaysians.

About CGC Digital

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

About Funding Societies

Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia. It is registered with the Securities Commission Malaysia (SC), as well as licensed in Singapore, Indonesia, and Thailand, and operates in Vietnam. It is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, and Golden Gate Ventures amongst others. The FinTech company provides business financing to small and medium-sized enterprises (SMEs), which are funded by individual and institutional investors.

It was given the Digitalizing Services for Retail Participations award by the Securities Commission Malaysia during the INVESTSMART® FEST 2019, the Monetary Authority of Singapore (MAS) FinTech Award in 2016, the Global SME Excellence Award at the United Nations’ ITU Telecom World in 2017, KPMG Fintech100 in 2018, Brands for Good in 2019, and ASEAN Startup of the Year by Global Startup Awards in 2020. In 2021, it was honourably mentioned as Responsible Digital Innovator of the Year by the World Bank IFC SME Finance Forum and won the MAS ASEAN Fintech award for the second time. Most recently, it was awarded the Top Lending/Financing Startup at the Fintech Frontiers Awards Malaysia 2023.

For more information on Funding Societies Malaysia, please visit https://fundingsocieties.com.my.

References

US$1 = RM4.62
Department of Statistics, Malaysia (2022)
Capital Masterplan 3, Securities Commission Malaysia

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Empowering Malaysian MSMEs through a one-stop digital marketplace: How one FinTech start-up is spurring better access to finance and targeted assistance for MSMEs

CGC Editor — Fri, 22 Dec 2023 08:21:42 +0000

In today’s digital-first world, financial technology, or FinTech, is poised to play a crucial role in empowering smaller businesses through different stages of growth. Digital platforms that are targeted at supporting MSMEs can create an enabling environment for better financial inclusion. Within this context, CGC Digital is taking on the challenge to develop an accessible and efficient one-stop digital financial marketplace for MSMEs, supporting their growth and increasing their financial resilience.

Lack of a one-stop financing marketplace for MSMES in the digital ecosystem

Being a small business in today’s fast-paced digital world is a big challenge. Especially in the wake of the global pandemic, many small businesses, or MSMEs, have been left grappling with the challenges of pivoting from analogue to digital, and growing their business in an online world. A majority of business owners today inhabit a “digital ecosystem”, defined as a network of interconnected digital technologies, platform and services that interact with each other to create value for businesses and consumers[1].

Current rapid technological advancements in the financial services industry have led to the emergence of digital financial services (DFS)[2] and growth of various marketplaces and platforms offering various integrated solutions for different market segments. However, despite these rapid advances, it appears that there is still a lack of a viable one-stop digital solution that holistically addresses the unique financing needs and issues faced by MSMEs.

MSMEs face challenges accessing financing via traditional banking systems

The crucial role of MSMEs in driving Malaysia’s economic growth cannot be understated, considering that they make up 97.4% of business establishments and contribute 38.4% to the country’s total GDP[3]. In total, approximately 1.12 million business establishments in Malaysia are defined as MSMEs[3] and they employ 48.2% of the country’s population[4].

One of the most critical components for MSMEs to successfully scale their growth is good access to finance and lines of credit. Access to finance promotes good cash flow and financial flexibility, which in turn allows MSMEs to embrace new opportunities when they arise, while sustaining their current operations.

However, insufficient cash flow and working capital are common barriers to MSMEs’ growth aspirations. For many small businesses, opening a business banking account or applying for a loan can prove challenging due to having insufficient credit history and a lack of collateral. Moreover, MSMEs still face difficulties navigating complex financial regulations in the traditional banking system. Brought together, these hurdles negatively impact the financial health of MSMEs and thus, their potential for high growth and business expansion.

Benefits of digital platforms and ecosystems for MSME financing

With their growing significance in driving economic expansion, it is important to empower MSMEs with better access to financing and provide assistance to accelerate their business.

In this digital age, digital ecosystems or platforms can be a key catalyst to MSMEs’ growth and competitiveness, by providing them with easy, convenient access to diverse financing options and solutions that are tailored to their unique financing needs.

As an alternative to physical financing environments, digital platforms have several characteristics which make it faster and easier for MSMEs to get their needs met. At the start of development, many platform creators will choose to prioritise value creation for their target market. In other words, when creating the ecosystem, the focus is usually put solely on the customer and understanding their challenges and needs[1]. This allows for a more tailored approach to designing a system that is solutions-based and capable of addressing very specific problems or issues.

The second advantage of a digital platform is that they are largely data driven and have the ability to amass a wealth of information about processes and transactions that take place on the platform, to generate insights and make strategic decisions[1]. Data analytics is one of the most important factors for any digital ecosystem and assists tremendously in optimising platform efficiency.

Thirdly, digital platforms can also harness the power of automation technologies to make data-driven insights actionable and dynamic. In the context of digital financial services, machine learning algorithms may be used to streamline existing business processes, enhance productivity and empower collaboration through seamless knowledge transfer. Collectively, this serves to accelerate the high impact potential of the digital platform and enable it to provide greater value for its user base.

How CGC Digital is innovating a one-stop digital marketplace to spur financing access and targeted assistance for MSMEs

In 2018, Credit Guarantee Corporation (CGC) had developed and launched imSME, a financing and loan referral platform that was the first of its kind in Malaysia[5].

Back then, the main function of the platform was to aggregate financing information from financial institutions, agencies and alternative financiers[6]. Besides this, imSME also served to matchmake MSME users with compatible financing products and facilities and assist with applying for loan/financing from a single platform[5]. In short, imSME was designed to be a digital tool that could provide MSMEs easy and convenient access to information resources and financial services.

As a data and fintech subsidiary of CGC, CGC Digital is now pushing to further optimise the imSME platform into a fully integrated digital marketplace. With its strong commitment to advancing financial sector digitalisation via an MSME-centric approach, the fintech company aims to innovate the platform to become an embedded finance ecosystem[6] that can support MSMEs’ needs at each stage of their growth journey.

While the core services of providing information and financing assistance will remain, the optimised imSME ecosystem will also incorporate new expanded features, such as digital credit guarantee and other digital credit supplementation products and services[6], to make access to financing simpler and even more seamless for MSMEs. These features are ultimately aligned with the goal of transforming imSME into a comprehensive, one-stop digital financing marketplace for smaller entrepreneurs and business owners.

Besides this, CGC Digital believes that partnerships with key players are essential to enable the imSME platform to offer higher value-added services to MSMEs. Thus, it will seek to identify and collaborate with relevant partners that can synergise with the platform’s ecosystem and contribute to co-creating value in different areas.

Through these efforts, CGC Digital’s ultimate vision for the imSME platform is to be a one-stop digital marketplace to pave the way for underserved MSMEs to have convenient access to financial services and support to accelerate their business.

Alignment with NIMP 2030

As a digital initiative that aspires help bridge the gap faced by MSMEs in accessing financing and drive greater financial inclusion, the imSME platform is highly relevant to the Madani government’s recently launched New Industrial Master Plan (NIMP) 2030.

The NIMP 2030 is a policy framework that lays out key goals and missions, as well as specific strategies and focuses aimed at driving Malaysia’s industrial development over the next seven years. Under the NIMP, CGC has been tasked to expand the imSME platform to show all available funding options, including government funding and those from the capital market, as part of a wider goal to mobilise a comprehensive financing ecosystem for SMEs[6].

CGC Digital not only embodies those goals, but is striving to take it a step further, by innovating imSME’s core product into a comprehensive digital financial services marketplace. By engaging with different partners to bring an array of financing products and digital services to the platform, it aspires to provide greater value to MSMEs through a targeted range of solutions tailored to meet MSMEs’ needs. Being a financial technology solutions provider, one of its goals is also to leverage AI and machine learning technologies to create a better customer experience for business owners, and enable a seamless, frictionless journey while on the platform.

With the imSME digital marketplace as its first milestone platform, CGC Digital is committed to continue spearheading digital innovation and to be a leading fintech solutions provider in the digital financial services ecosystem. It will continue to proactively innovate digital solutions to serve MSMEs better and grow alongside them to help them succeed.

References:

Talin, Benjamin. “What Is a Digital Ecosystem? – Understanding the Most Profitable Business Model,” December 9, 2020. https://morethandigital.info/en/what-is-a-digital-ecosystem-understanding-the-most-profitable-business-model/.
World Bank. “The Role of Digital Financial Services in Bridging the SME Financing Gap,” July 13, 2023. https://blogs.worldbank.org/psd/role-digital-financial-services-bridging-sme-financing-gap.
SME Corp. Malaysia. “Profile and Performance of MSMEs in 2022.” Accessed September 18, 2023. https://www.smecorp.gov.my/index.php/en/micro-enterprises
The Star Online. “Malaysia’s MSME GDP Surges 11.6% in 2022 to RM580.4bil -DOSM.” The Star. Accessed December 6, 2023. https://www.thestar.com.my/business/business-news/2023/07/27/malaysia039s-msme-gdp-surges-116-in-2022-to-rm5804bil–dosm.
CGC Malaysia. “About imSME.” imSME. Accessed December 6, 2023. https://imsme.com.my/portal/about-imsme/.
“New Industrial Master Plan (NIMP) 2030,” 2023. https://www.nimp2030.gov.my/nimp2030/modules_resources/bookshelf/NIMP_20303/index.html.

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CGC Digital, MDEC and PayNet collaborate to bridge MSMEs’ RM90 billion financing gap via innovative alternative credit scoring

CGC Editor — Mon, 18 Dec 2023 03:41:13 +0000

Kuala Lumpur, Malaysia, 18 December 2023 – CGC Digital Sdn Bhd (CGC Digital), Malaysia Digital Economy Corporation (MDEC), and Payments Network Malaysia (PayNet) signed a collaboration agreement aimed at driving financial empowerment and fostering inclusivity among Micro, Small, and Medium Enterprises (MSMEs) in Malaysia through pioneering Alternative Credit Scoring solutions.

This tripartite partnership signifies a collective commitment to address a key national-level Problem Statement, the RM90 billion financing gap to MSMEs. The digital tool to power the bridging of this funding gap will be the Alternative Credit Scoring, undertaken by CGC Digital as it explores possible alternative data to facilitate the development of its Alternative Credit Scoring model. This partnership will be led by CGC Digital in providing the digital guarantee developed for CGC, MDEC in connecting the fintech players and championing policies/frameworks, and PayNet in the utilisation of its payments data.

PayNet as the national payments network has over the years aggregated a sizeable data through its product range – DuitNow (also known as Malaysia’s National QR Code), JomPAY and FPX. MSMEs who are not SSM registered but may have registration under local councils could have transaction data in any of these data points. “Collaborating with MDEC and PayNet, CGC Digital has identified potential fintech companies to embark on proof-of-concept initiatives aimed at validating the effectiveness and viability of Alternative Credit Scoring model. This initiative is aimed to empower MSMEs and bridge the financing gap by democratising access to credit guarantee and financial services in advancing financial inclusion,” adds Yushida Husin, CEO of CGC Digital.

Ts. Mahadhir Aziz, CEO of MDEC says, “This collaboration is a testament to our commitment to drive innovation in the financial sector and address the MSMEs financing gap. The Malaysia Digital (MD) national strategic initiative and suite of dynamic PeMangkinMD programmes aim to transform our nation’s digital capabilities, foster the growth of tech companies, and boost the digital economy. We are optimistic to facilitate more partnerships between financial institutions, fintech companies and relevant ecosystem partners with a common goal of revolutionising credit assessment methods which will be a game changer for the financial sector”.

This MOU is envisaged to spark ideas to promote and scale more pilots using Alternative Credit Scoring data points among industry players. According to Gary Yeoh, Chief Commercial Officer of PayNet adds, “Validation of Alternative Credit Scoring’ effectiveness as a complementary tool in the credit assessment of businesses across all sizes will catalyse new frontiers on how credit is assessed. This could be a tipping point in a much-needed financing ecosystem where traditional banks are limited by conventional credit scoring tools”.

Using innovative solutions, e.g. artificial intelligence, machine learning, etc., for insights and data from non-traditional sources such as transaction data, utility and assessment payments, rental payments, mobile payments and more can potentially be used to assess MSMEs’ creditworthiness based on historical payment records. Collectively, all parties are cognisant of the opportunities that can be crystalised through Alternative Credit Scoring. The ability to co-create a data sharing environment that supports: 1) Thriving community of fintech companies; 2) Accessibility of financial products across all businesses and people; and 3) Customisation of financial products and services will revolutionise Malaysia’s future financial landscape.

About MDEC

Malaysia Digital Economy Corporation (MDEC), a government agency under the purview of the Ministry of Communications and Digital, was established in 1996 to lead Malaysia’s digital economy. Beginning with the implementation of the MSC Malaysia initiative, we have since then catalysed digital transformation and growth all over the nation. By offering greater incentives and governance for growth and re-investment, we aspire to bolster Malaysia’s status as the digital hub of ASEAN, opening new doors and driving shared prosperity for all Malaysians.

For more information on MDEC, please visit www.mdec.my.

About CGC Digital

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

About PayNet

Payments Network Malaysia (PayNet) is the national payments network and central financial infrastructure for Malaysia with the vision to empower Malaysia’s digital economy. Our extensive retail payments suite, DuitNow (QR and P2P), JomPay (Bill Payments), FPX (Online), MyDebit (Domestic Debit), MEPS (ATM), and IBG (Interbank GIRO) has near ubiquitous coverage across the nation and is part of the daily fabric of life in Malaysia. In addition, PayNet’s real time retail QR payments network, DuitNow is also interoperable with domestic schemes in Singapore, Thailand and Indonesia as well as international schemes to enable seamless cross-border transactions.

PayNet is committed to promoting a secure, efficient, and innovative payments ecosystem in Malaysia, and works closely with its stakeholders to develop new products and services that meet the evolving needs of consumers and businesses.

For more information, please visit www.paynet.my.

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