Funding Societies Teams with Carsome to Offer USD $200m Financing to Car Dealersby Fintech News Malaysia November 19, 2019
Funding Societies Malaysia, the largest peer-to-peer (P2P) financing platform in the country and Southeast Asia, has announced its partnership with Carsome, one the region’s largest used car trading platform to offer dealer financing, a financing product offered to local car dealers for the purchase of used motor vehicles.
Through this collaboration, 1,600 used car dealers under Carsome could potentially benefit from a total financing amount of USD 200 million.
The partnership is in line with both platforms’ mutual aim to empower Malaysia’s small and medium-sized enterprises (SMEs) with short-term financing to help expand their businesses, particularly the underserved local used car dealers.
Registered used car dealers on Carsome’s platform are eligible for financing of up to 70 percent of the transaction value of the used cars via a seamless and fast process. One of the main advantages of the dealer financing offered by Funding Societies is that it is open for application to any type of businesses, from sole proprietorships and partnerships to private limited (Sdn Bhd) companies, through Carsome.
Almost half of the one million car units sold in 2018 are used cars, which points to a high demand for the industry. However, used car dealers often face issues when it comes to obtaining capital to expand their businesses as traditional financing avenues do not usually cater to many used car dealers that are sole proprietors. This is where the partnership fills the gap by providing financing opportunity for used car dealers to purchase inventory.Wong Kah Meng, Co-founder and Chief Executive Officer of Funding Societies Malaysia, said,
“Our tailor-made dealer financing product addresses the pain points revolving around used car financing traditionally. For instance, the requirement of 100 percent upfront payment by the SME, cumbersome documentation of business operations, among others, hinders these SMEs from expanding their business with limited cash flow. This is where we come in by providing a seamless process and, through automation and technology, speed up and lower the cost to serve the financing needs of these SMEs in a viable manner.”
“We have seen great traction for dealer financing to date, where we have been partnering with several car bidding platforms. Nevertheless, we are very much looking forward to this partnership with Carsome as this will surely help us to reach out further and serve many more SMEs under their platform,”
Eric Cheng, Chief Executive Officer and Co-Founder of Carsome, said,
“We are excited to work with Funding Societies to provide our dealers with a seamless financing product to help to grow and scale their businesses, together with us. As the region’s largest used car trading platform, Carsome has been at the forefront of driving the automotive industry forward, and the partnership with Funding Societies will help our mission to better serve the users of our platform.”
As part of the collaboration, Carsome will inspect the condition and verify the value and identity of the used cars before putting them up for bidding. By onboarding used car dealers with proven track record based on their repayment behaviour, business history and performance with Carsome, Funding Societies aims to better manage the risk to benefit their investors.
Since introducing dealer financing, Funding Societies has disbursed more than RM 30million across more than 1,500 notes as of November 2019. Regionally, it has reached close to RM 3billion in total disbursed working capital to SMEs across Southeast Asia since its establishment.