KUALA LUMPUR: Wetek Technology (M) Sdn Bhd, which has a money-lending licence for micro-financing in Malaysia, aims to provide about RM2 billion financing to entrepreneurs and small business owners in Southeast Asia.
Its director Howard Leung Hao said the company was expanding its micro-financing venture to become a market leader in the region.
Last week, Wetek signed an agreement with XOX Bhd, which has an e-wallet licence, to provide up to RM1 billion micro-financing to the latter's 2.2 million subscribers in Malaysia.
Leung said both companies had received vast enquiries from existing XOX subscribers and other small business owners on the plan.
"The industry is hugely under served in Southeast Asia. A lot of people or small business owners require funding to keep their business afloat and to expand. With the Covid-19 pandemic, it is harder for them to get loans from the traditional banks."
He added that the company had been providing micro-financing in China and Hong Kong with its local partners there.
The venture had been very successful to the extent that some of the small business owners had expanded and launched an initial public offering, he claimed.
"In Malaysia, we are targeting people in both rural and non-rural areas and who are the existing customers of XOX. If the current RM1 billion is fully utilised, we may then launch a second tranche," he told the New Straits Times.
Globally, the microfinance industry had serviced 139.9 million borrowers in 2018, and 65 per cent of microfinance borrowers live in rural areas where traditional banking and lending is difficult or impossible.
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.
Leung, who is the chairman and chief executive officer (CEO) of Brilliant (Hong Kong) Holdings Ltd and his partner, Liang Zeng, an internet entrepreneur and venture capitalist, have been providing micro-financing in China and Hong Kong for about 12 to 15 years.
For the micro-financing business in Southeast Asia and Malaysia, Leung said they would both dig into their coffers and also issue shares in the company at a later stage, to expand the business.
XOX chief executive Ng Kok Heng said the company's subscriber base was expanding and could double by the year-end.
"Last year we proposed a rights issue to raise up to RM66 million and we allocated RM33 million of the proceeds raised to expand the company's e-wallet function by developing a new mobile application to support micropayments, among others," he added.