Funding Societies enters neobanking space with investment in Indonesia’s Bank Index

Southeast Asian SME digital financing platform Funding Societies (also known as Modalku in Indonesia) alongside automotive marketplace platform Carro has announced an undisclosed investment in Indonesia’s Bank Index.

The move marks Funding Societies’s entry into the neobanking space and its drive to offer digital financial services to underserved businesses in the region.

With a focus on SME Banking, Bank Index is a privately-owned national bank with a footprint of 53 offices networks in major commercial areas across Jabodetabek, Java, Sumatra, Bali and Batam. It also conducts business across several commercial supply chains while offering mobile and internet banking services to its clients.

Also Read: Funding Societies lands US$18M debt fund, on track to raise US$120M

Kelvin Teo, Co-Founder and Group CEO of Funding Societies, said, “…our complementary capabilities will enable us to serve SMEs better across banking, payments, lending and digital services to uplift Southeast Asia’s economies through small businesses.”

The Indonesia FinTech Association (AFTECH) Annual Members Survey held in 2021 revealed that the neobank cluster can rapidly grow in the future, especially for the unbanked population, with an estimated growth of 51 per cent in Indonesia. This is further backed by Ernst & Young’s 2021 NextWave Global Consumer Banking Survey, highlighting the highest rates of adopting neobanking activities amongst consumers in the Asia Pacific market.

Gimin Sumalim, President Director of Bank Index, added, “Together, we will partner to forge strategic initiatives based on our shared vision and mission to expand our services to our target market greatly. This collective step is also a reference point to continue pursuing comprehensive digital transformation.”

Funding Societies provides digital financing services, where developing MSMEs can apply for up to SGD2 (US$1.5) million in working capital financing funded by institutional and retail investors through a digital market.

In addition to Singapore and Indonesia, Funding Societies also operates in Malaysia, Thailand, and Vietnam. The company has facilitated more than SGD3 (US$2.2) billion in working capital through more than five million MSME loan transactions.

Also Read: Samsung backs Funding Societies to drive its vision of financial inclusion for SMEs in SEA

Funding Societies is backed by SoftBank Vision Fund, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, Samsung Ventures, BRI Ventures, Endeavor, SGInnovate, Qualgro, and Golden Gate Ventures, amongst others.

In February this year, Funding Societies announced a US$294 million funding led by SoftBank Vision Fund 2.

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