Kelvin and Reynold, welcome to Marketing In Asia. To start, can you please do a little introduction of yourselves.
K : I’m the co-founder of Funding Societies | Modalku (“FSMK”). Prior to this, I was a consulting professional at KKR, McKinsey and Accenture in Southeast Asia, where I have met many SMEs struggling with financing. Originally from Malaysia, I came to Singapore at 15 on a scholarship, and I always see myself as an underdog. Hence when we realised the potential of P2P lending while studying at Harvard, we took it upon ourselves to bring it to Southeast Asia and help SMEs, who are often underdogs like us.
R : I’m Reynold, Co-Founder of Funding Societies | Modalku (“FSMK”) also CEO of Modalku. I met Kelvin at Harvard Business School, we became best friends and aspired to build an impactful business enterprise in SEA. Prior to FSMK, I was an executive at United Family Food (family business), one of the largest confectionery in Indonesia, focusing on operations excellence. A few decades ago, my parents were first-time entrepreneurs and SMEs who were able to grow their companies. Seeing their effort and growth made me want to support fellow SMEs, that’s why I’ve been fortunate to work with Kelvin on this endeavour.
2. Most of us know what P2P is but when I was pitched this story, I had to ask around if my colleagues and those out there know what P2P Lending is all about and a majority of them did not. So, I had to Google to learn about it and the reason why I said ‘YES’ to this interview is that I feel many out there should know about this amazing platform. So, can you tell our readers what P2P Lending indeed is?
K : As the name peer-to-peer (“P2P”) lending suggests, it’s a business model whereby a platform enables an individual to lend to another individual. Attractive as it may be, we find consumer loans to be consumptive, while SME loans to be productive by nature. We chose the harder path of peer-to-business (“P2B”) financing, because SMEs account for nearly half of GDP and 2 out of 3 jobs in Southeast Asia, enabling us to achieve greater impact in societies. Hence as an SME digital financing platform, Funding Societies give unsecured loans to SMEs for growth, crowdfunded by investors for sustainable returns.
3. Kelvin, I read on Bloomberg that as a student in Harvard Business School, a web-based peer-to-peer lending startup was part of your curriculum and you actually pitched the project to South East Asia’s biggest bank, DBS Group Holdings Ltd. I personally find it brave but look at where it lands you right now! Can you walk us through that experience reaching out to DBS’s CEO, Piyush Gupta?
K : Well, I guess step number 1, don’t say “we are students”, but don’t misrepresent yourself too. The original idea came from our Product Head Pramodh Rai, and we thought why not. It was a pleasant surprise when Piyush responded – within 3 hours. We put our best foot forward, met their senior team and the first bank-P2P lender partnership in Southeast Asia was born.
4. The name Funding Societies is very eye-catching. How does that name come about?
K : We wanted a name that represents what we do i.e., purposefully finance the growth of Southeast Asia, hence the active and virtuous verb ‘Funding’, as well as the plural and communal noun “Societies”. We had to jump through several hoops to secure the name, but it is worth it. It reminds us daily of our cause.
5. Modalku means ‘my capital’ in Bahasa; which is pretty much what you are offering but is there any other story behind it?
R : Different with Singapore, we feel that the words Funding Societies might not be readily understandable with Indonesians. So we brainstormed what is a more local word that Indonesians can relate to. There are some iterations that we went through before finally ended up with Modalku. We like it since it’s simple, straight to the point, and very easy to understand.
6. When it comes to marketing Funding Societies and Modalku, what have your strategies been?
K : We simply be authentic and helpful to whoever cares to listen. We believe by being true to our values and purpose, be it in our daily conduct or marketing efforts, others can sense our difference and hopefully resonate with us. As Reynold detailed, we take an omnichannel approach and are constantly learning, as reaching SMEs on a taboo subject is no mean feat.
R : We believe educating the public, especially on how P2P lending can impact their life, is the key to a successful marketing strategy. Thanks to supporting from OJK as well, we have done quite intense communication through media engagements & publications, also marketing campaign utilizing offline and digital channels to convey our key messages to the target market. In addition, we often participate as key speakers in events relevant to the financial industry.
7. Branding seems to be the keyword these days. How important is branding to you?
K : Branding is important to communicate our promise to our customers, which permeates from our core values. This year, we are gradually stepping up branding in a targeted way to share with SMEs and the general public on our form of alternative financing and investment, because it truly works.
R : Additionally, we believe branding can create a memorable impression for our customers and our prospective customers. It is also a way to get more people interested to better understand our business and our offerings, hence enable us to highlight the impact we can offer to improve their lives.
8. Right now, Funding Societies and Modalku have a presence in Singapore, Malaysia and Indonesia. Any plans for further expansion in the region?
K : Surely, but slowly because SME financing is a very localised business and Southeast Asia is a fragmented market, each country with its unique characteristics. Hence each expansion almost feels like building a new business. Moreover, there are still so much to do in Singapore, Malaysia and Indonesia. It is risky to expand prematurely, only to find oneself saddled with regulatory breaches and defaults.
9. So gentlemen, tell us, are there any criteria as to who qualifies for this funding?
K : It’s back to the basics of 5C’s of Credit – character, capacity, capital, conditions and collateral. Most SMEs who come to us do not have sufficient capital and collateral, but they may have trustworthy character, capacity to repay and predictable operating conditions. As long as with it we can determine your willingness and ability to repay, we will lend.
R : In Indonesia, our scope of area for MSMEs is within Jakarta, Depok, Tangerang, Bekasi, Bandung and Surabaya. The business has to already operate a minimum of 1 year. We also partner with major e-commerce players namely Tokopedia, Bukalapak, Lazada to provide loans to their online business merchants.
10. What do you guys do for fun?
K : I try to gym regularly, after being introduced to it by Reynold at Harvard, though you may find it hard to tell from my shape. Recently, I signed up for a mountainous half marathon with a potential business partner. I also enjoy chess, poker and books.
R : I try to stay fit so I work out regularly or play soccer occasionally with the team. I love outdoor activities like trekking and kayaking and I definitely love networking.
11. Kelvin & Reynold, thank you so much for your insights. On a parting note, how can our readers get in touch with you or know more about Funding Societies and Modalku?
K : Feel free to drop me a note on LinkedIn! You can find out more about Funding Societies at fundingsocieties.com. Our friendly team and I are happy to answer any questions on LiveChat.
R : Drop me a note on LinkedIn! I hope to answer everyone, but do contact my team via live chat on our platform, modalku.co.id, or our mobile app to find out more about what we do.