Axiata Digital, CGC team up for potential digital bank guarantee

KUALA LUMPUR: Digital’s financial technology holding arm, Boost Holdings Sdn Bhd, via its subsidiary Axiata Digital Capital Sdn Bhd (Aspirasi) has inked a memorandum of understanding (MOU) with the Credit Guarantee Corporation Malaysia Bhd (CGC) for a potential digital bank guarantee.

In a joint statement today, Boost Holdings and CGC said the MOU is aimed to accelerate financial inclusion for the underserved and unserved segments.

The MOU, according to the statement, encompasses two key parts.

The first being a commitment to explore extending a portfolio guarantee for the future digital bank’s small and medium enterprises-focussed loans, which will be an extension of Aspirasi’s current discussions for a similar facility with CGC.

Meanwhile, the second is for Aspirasi to collaborate with CGC in taking up referrals to provide financing for eligible micro-small and medium enterprises (MSMEs) without collateral.

“In connection with this, CGC will onboard Aspirasi onto its imSME, an online one-stop platform that provides an array of financing products and services for MSMEs,” the statement said.

Axiata Digital chief executive officer (CEO) and Boost Holdings chairman Mohd Khairil Abdullah said over the last few years, its digital-first approach using artificial intelligence (AI) and machine learning has enabled it to provide relevant solutions to solve pain points faced by MSMEs.

“Often our facilities are the only ones available to ‘thin file’ MSMEs without traditional data sources.

“These are precisely the segments that will benefit the most from a CGC guarantee, enabling them wider and more affordable access to transformative financing,” he said.

Mohd Khairil added that an established institution like the CGC would further achieve its ambition to provide comprehensive digital financial services for the region as the company embarks on the journey to build a digital bank.

Meanwhile, CGC president and CEO Datuk Mohd Zamree Mohd Ishak said the MOU signifies a commitment to further promote the financial inclusion agenda.

“CGC has held discussions with several digital banking licence aspirants and looks forward to collaborating with digital banks once they commence operations.

“CGC is optimistic of finalising the discussion leading to a portfolio guarantee scheme with Axiata Digital for its Aspirasi product.

“We are also pleased to onboard Aspirasi on imSME, Malaysia’s first online financing or loan referral platform,” he said.

According to the statement, Boost’s micro-financing and micro-insurance service provider, Aspirasi, has funded 1,907 merchants, disbursing 13,721 loans amounting to RM134.43 million in the first quarter of this year.  – Bernama