Wetek Technology (M) Sdn Bhd plans to ride on its money-lending licence in Malaysia to tap the huge potential for micro-financing in Southeast Asia.
The company is looking to provide micro-financing in partnership with XOX Bhd to entrepreneurs and small business owners in Southeast Asia in the amount of RM2 billion, reported the New Straits Times (NST) today.
Wetek already has an existing partnership in place with XOX.
Last week Wetek signed an agreement with XOX to ride on the latter's e-wallet licence, and provide micro-financing in the amount of RM1 billion to XOX's 2.2 million subscribers in Malaysia.
In a statement, Wetek Director Howard Leung Hao said the company is expanding its micro-financing venture to become a market leader in the Southeast Asian region.
Photo: Wetek Director Howard Leung
He said 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, this industry has been growing at an annual rate of 11.5 per cent over the past few years and projected to reach US$146.8 billion by 2021.
The NST quoted Leung Hao who said that since the announcement last week on the RM1 billion micro-financing venture, both Wetek and XOX have received a number of enquiries from existing XOX subscribers and small business owners about their micro-financing plan.
On why Wetek wants to expand in Southeast Asia, Leung Hao said the market is hugely under served in the region.
He said there are a lot of small business owners who require funding to keep their business afloat and with the Covid-19 pandemic, more and more businesses are finding it harder to obtain loans from banks.
Photo: Wetek Director Liang Zeng
According to the article, the two existing directors of Wetek - Leung Hao and Liang Zeng - have been providing micro-financing in China and Hong Kong for over 10 years.
They have been doing this together with their local partners in China and Hong Kong and they have been very successful.
Both Leung Hao and Liang Zeng have strong credentials and are well known in the market in China and Hong Kong.
Leung Hao is the Chairman and Chief Executive Officer (CEO) of Brilliant (Hong Kong) Holdings Ltd and Liang Zeng is an internet entrepreneur and venture capitalist.
In Malaysia, Wetek and XOX are targeting entrepreneurs and small business owners in rural and non-rural areas, who are existing customers of XOX.
Hopefully the current RM1 billion is fully taken up as both Wetek and XOX are already gearing up to launch a second tranche.
Leung Hao said in the NST article that for the micro-financing business in Southeast Asia and Malaysia, they will tap into their coffers or issue shares in the company to fund the business and expand.
Meanwhile, XOX's subscribers is also said to be growing on a day-to-day basis and it could exceed four million by the end of this year.
The company has undertaken several initiatives and invested a huge sum to grow its subscriber base and attract new customers.