AXA Affin General Insurance (AAGI) has partnered with Malaysian lending firm Peoplender Sdn Bhd which operates Fundaztic, a peer-to-peer (P2P) financing platform for small and medium enterprises (SMEs) in the country.
The tie-up will see AAGI provide SMEs with flexible, trade-specific commercial insurance coverage to ensure business continuity while Fundaztic supports these businesses’ funding needs by connecting them with mass retail investors through the P2P platform.
According to Bank Negara Malaysia, the country’s central bank, SMEs are a critical component of the economy, bringing in over one-third of GDP and providing employment to over four million Malaysians.
Kristine Ng, CEO of Peoplender, believes that there is a huge gap in financing for micro and small businesses due to the size of their financing needs, internal banking policies, and inability to meet banks’ requirements.
“Funding is the key to drive growth and the lack of funding hampers the ability of many SMEs to scale their business,” Ng said. “Having AAGI on board is a promising support for the industry and we believe our partnership will raise viability on P2P financing as an alternative funding vehicle among local SMEs.”
Crowdfunding in Malaysia is expected to expand following the introduction of regulation for equity crowdfunding in 2015 and P2P financing in 2016.
“We know there are many underserved SMEs who are unprotected,” said Rebecca Tan, chief marketing officer of AAGI. “At AXA, we believe in empowering SMEs and providing them with complete piece of mind in their business ventures. We have gained insights on the SME industry, the insurance priority and mindset of SME owners to carefully identify their needs based on the specific trade they are operating in.”
