GXBank First Digibank to Get IFC Guarantee for US$110 Million MSME Loan Portfolio

GXBank has secured a guarantee from the International Finance Corporation (IFC) to support an MSME loan portfolio of up to US$110 million.

IFC, the World Bank Group’s private-sector development arm, will provide up to US$4.95 million in unfunded first-loss coverage.

This means IFC will cover eligible initial losses if borrowers default, reducing some of the risk GXBank faces when extending loans.

GXBank is said to be the first digital bank in the region to receive an IFC first-loss guarantee.

The arrangement is designed to help GXBank expand financing for businesses with limited credit histories or physical collateral.

The guarantee is also expected to reduce the risk-weighted capital GXBank must hold against eligible loans under Bank Negara Malaysia’s framework.

This would give the digital bank more capacity to lend to underserved businesses.

“This partnership with IFC is an international vote of confidence in GXBank’s proprietary risk engines and operational maturity. Micro-entrepreneurs form the foundation of Malaysia’s economy, yet traditional collateral requirements leave vast credit demand unmet.

By combining our technology-led underwriting with IFC’s first-loss credit protection and local guarantee schemes like Credit Guarantee Corporation Malaysia (CGC), we can sustainably scale access to capital for underserved business owners while keeping our balance sheet resilient. The impact of our model is already tangible – 15,000 MSMEs have opened digital accounts with us, leading to more than 5,000 loan drawdowns to date.”

said Kaushik Chowdhury, Chief Executive Officer of GXBank.

“Expanding access to finance for micro, small, and medium enterprises is a key driver for inclusive economic growth across emerging markets.

This collaboration demonstrates how digital innovation can help bridge financing gaps for underserved MSMEs, supporting business expansion, job creation, and stronger economic resilience in Malaysia.”

said Allen Forlemu, Regional Industry Director, Financial Institutions Group, IFC.

The IFC agreement builds on GXBank’s existing MSME financing initiatives. Since March, the bank has approved RM27 million in facilities guaranteed by CGC.

GXBank has also increased its maximum credit limit for expanding businesses from RM150,000 to RM350,000.

The digital bank recently completed a proof of concept with Malaysian fintech Finory to explore automated onboarding for micro traders using business licences issued by local authorities.

Finory previously won GXBank’s TeXnovasi Accelerator Programme.