Fintechs Bay Smart Capital Ventures (CapBay) and CGC Digital have launched a digital guarantee scheme aimed at bridging the financing gap for micro, small and medium-sized firms in Malaysia.
It is the first dual-facility offering under the CGC Digital guarantee scheme, meaning it provides both Islamic and conventional financing to target “overall market inclusion”, the companies said.
Petaling Jaya-headquartered firm CapBay delivers a supply chain finance and peer-to-peer financing platform that connects businesses to banks and investors.
It uses AI to make credit decisions, which “drastically” reduces evaluation times and enables capital to be allocated to MSMEs “with unprecedented speed”, CapBay said. To date, it claims to have facilitated over RM5.4bn (US$1.36bn) in financing for more than 2,500 SMEs.
CGC Digital is a subsidiary of Credit Guarantee Corporation Malaysia, which is majority-owned by the country’s central bank.
The initiative offers underserved MSMEs capital with a “reduced interest rate ceiling to support sustainable growth and working capital needs”.
It is aimed at businesses with at least 51% Malaysian ownership and provides repayment periods of up to 60 months for loans of between RM50,000 (US$12,570) and RM500,000 (US$125,700).
Ang Xing Xian, co-founder and chief executive of CapBay, said: “By leveraging CapBay’s AI-driven credit assessment, we can offer seamless, rapid digital financing to serve the ‘missing middle’, viable enterprises that are often overlooked.
“Backed by CGC Digital’s guarantee, this strategic allocation represents our shared commitment to injecting vital liquidity into the MSME landscape so grassroots businesses can thrive in a modern economy.”
Yushida Husin, chief executive of CGC Digital, said: “By offering a guarantee scheme that accommodates both Shariah-compliant and conventional needs, we are not only providing a safety net for financiers but also opening doors for small businesses to scale.
“This initiative aligns with our mandate to empower the underserved with the financial tools necessary for sustainable growth.”
CapBay previously grew its Islamic supply chain finance capabilities through an investment from Kenanga Capital Islamic back in 2021.
