SME Corporation Malaysia (SME Corp) has appointed syariah-compliant peer-to-peer (P2P) financing platform microLEAP as the financial intermediary under its Digital Financing Initiative (DFI) pilot project.
In a statement, microLEAP said the collaboration will see SME Corp disburse RM10 million worth of syariah-compliant financing to micro, small and medium enterprises (MSMEs) through a readily available, fully online platform that provides an array of syariah-compliant financing services.
It said that although banks had introduced a variety of solutions to aid businesses, there is still more to be done to reach out to MSMEs that make up 98.5% of registered businesses in Malaysia.
It said MSMEs that qualify will be given access to an online payment schedule, automated payment reminders and an end-to-end default management system.
With this, issuers (borrowers) are able to raise low-cost financing from RM50,000 to RM500,000, with the option of monthly repayments between one and 36 months.
These funds will be disbursed to businesses within four working days (excluding public holidays) upon approval and completion of the Islamic Commodity Murabahah Trade. MSMEs need to apply to be SME Corp members to qualify for the DFI programme.
microLEAP founder and chief executive officer (CEO) Tunku Danny Nasaifuddin Mudzaffar said the firm is thrilled to be given this opportunity to assist the government to facilitate syariah-compliant financing for more businesses in need.
“We look forward to this partnership and hope that we are able to continue making a positive impact,” he said.
Meanwhile, SME Corp CEO Rizal Nainy said MSMEs in particular had been severely affected by disruptions to their cash flow.
“As the bedrock of our economy, it is important to ensure that these businesses are able to raise funds in a timely manner alongside reliable, online and syariah-compliant platforms such as microLEAP,” he said.