KUALA LUMPUR: XOX Bhd, which holds an e-wallet licence (XOX eWallet), will provide micro-financing to the tune of RM1 billion to its 2.2 million subscribers.
The company's subsidiary XOX Media Sdn Bhd has inked a partnership agreement with Wetek Technology (M) Sdn Bhd for the prospect.
In a statement today, XOX said the service would be extended to individuals and small businesses who lack access to conventional banking and related services by populating its eWallet for usage in XOX Digital Marketplace.
"We believe this partnership will provide a vital component in the XOX eWallet ecology enabling subscribers to participate in the new normal of touchless and online economy. XOX is committed to promoting digitisation among subscribers to enhance auto top-up, Fintech, entrepreneurship and eCommerce,"it said.
XOX said in the future, the company, together with Wetek, planned to launch the micro-financing services to all Malaysians.
Its chief executive officer (CEO) Ng Kok Hen told the New Straits Times when contacted, that once the RM1 billion micro-financing was fully taken up, XOX and Wetek might issue a second tranche of financing.
"We will definitely look at a second tranche as many individuals and small businesses require urgent funding," he said.
Wetek director Howard Leung Hao, who is also chairman and CEO of Brilliant (Hong Kong) Holdings Ltd, said the company formed a partnership with XOX to ride on the latter's strong subscriber base.
"Apart from over 2.2 million subscribers, XOX has strong infrastructure in its dealership channels and technology to grow the relatively unserved market in Malaysia. This is a huge opportunity for Wetek to grow in this business," he said.
Globally, the microfinance industry had serviced 139.9 million borrowers in 2018, with 65 per cent of microfinance borrowers living in rural areas where traditional banking and lending is difficult or impossible.
Leung Hao said, according to Microfinance Barometer 2019, the industry had been growing at an annual rate of 11.5 per cent over the past few years and was projected to reach US$146.8 billion by 2021.
"Micro financing is a good strategy to populate eWallet with funds especially in the challenging environment of eWallet adoption nationwide. Once eWallet subscribers have money in the ewallet, they can perform transactions through XOX Digital ecology," he said.
Leung said Wetek wanted to be the market leader of micro-financing in Southeast Asia.
The other director of Wetek is Liang Zeng, who is an internet entrepreneur and venture capitalist.
Liang Zeng invests and incubates the companies in digital marketing, artificial intelligence and enterprise services. He has held senior positions as senior vice-president (VP) of Kingdee International Software Group, VP of Microsoft Greater China, and most recently, VP of Baidu Inc. and chief executive officer of Baidu Nuomi.