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How does SME Digital Financing work?
How does SME Digital Financing work?

Explanation of SME digital financing.

Melissa avatar
Written by Melissa
Updated over a week ago

SME digital financing refers to the practice of lending and borrowing money from one individual to another through debt investment. 

At Funding Societies, we help SMEs by raising funds for the SMEs through debt investment and distributing the aggregated amount raised to the SMEs in a form of financing once the target has been met.

Through SME Digital Financing, you can invest smaller amounts across a large number of SMEs, which means you have the opportunity to diversify your portfolio, hence minimizing your risk.

To know more about what we do at Funding Societies please click here.

The P2P process : 

  1. SME applies for financing. Funding Societies assess their application and their creditworthiness. If successful, we will make them an offer.

  2. The financing will then be open for crowdfunding by the investors. Investors will be able to invest across lots of SMEs with their own risk appetite to build a diversified portfolio. 

  3. The Issuer company pays the financing amount with returns in fixed monthly installments. Issuer company makes the payment to Funding Societies, and we will distribute it to all investors who funded for the Issuer company. 

  4. Payments can be reinvested as long as your account is active. You can use the repayments to continuously invest in other Issuer company. This will help in compounding and maximizing your return.

  5. You can always request for withdrawal when you are ready. 

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