Axiata Digital inks MOU with CGC for potential digital bank guarantee

Axiata Digital inks MOU with CGC for potential digital bank guarantee
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KUALA LUMPUR (June 28): Axiata Digital's fintech holding arm, Boost Holdings Sdn Bhd, through its subsidiary Axiata Digital Capital Sdn Bhd (Aspirasi) inked a memorandum of understanding (MOU) to collaborate with Credit Guarantee Corp Malaysia Bhd (CGC) for a potential digital bank guarantee.

In a joint statement, Boost Holdings and CGC said the MOU was signed between digital banking licence aspirant Aspirasi and CGC today aims to accelerate financial inclusion for the underserved and unserved segments.

According to the statement, the MOU encompasses two key parts. The first being a commitment to exploring extending a portfolio guarantee for the future digital bank's small and medium enterprises focused loans, which will be an extension of Aspirasi's current discussions for a similar facility with CGC, and the second 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.

Chief executive officer (CEO) of Axiata Digital and chairman of Boost Holdings, Mohd Khairil Abdullah, said the group is always looking for the right partners to enlarge its presence and collaboration with like-minded and experienced partners like CGC.

"The MOU with CGC today strengthens our ability to meet the financial requirements of the underserved and unserved segments. Over the last few years, our digital-first approach using AI and machine learning has enabled us to provide relevant solutions to solve pain points faced by MSMEs, and we have built a solid track record of serving the underserved. 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 noted.

Sheyantha Abeykoon, CEO of Boost Holdings, said: "This MOU complements our existing initiatives to finance micro entrepreneurs and businesses who lack access to traditional means through simple and convenient digital solutions available on their smartphones."

The statement also noted that in the first quarter of 2021, Boost's micro-financing and micro-insurance service provider — Aspirasi — funded 1,907 merchants, disbursing 13,721 loans amounting to RM134.43 million.

Meanwhile, CGC's president and CEO Datuk Mohd Zamree Mohd Ishak said the group has held discussions with several digital banking licence aspirants and looks forward to collaborating with digital banks once they commence operations.

"This MOU signifies the commitment to further promoting the financial inclusion agenda. CGC is optimistic of finalising the discussion leading to a portfolio guarantee scheme with Axiata Digital for its Aspirasi product," he said.

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