16/06/2023 (Malaysia) - Boost, the regional full spectrum fintech arm of Axiata, is set to make significant strides in closing the financial inclusion gap in Southeast Asia. With access to financing being a persistent challenge for micro, small, and medium-sized enterprises (MSMEs) in the region, Boost aims to address this issue by offering accessible financial solutions through its holistic ecosystem.
According to reports, small businesses in Malaysia face difficulties in obtaining financing due to higher collateral requirements by traditional financial institutions and delays in loan approval or disbursement. Similarly, Indonesia also grapples with financial exclusion, with a significant percentage of its population classified as unbanked or underbanked. These challenges indicate a substantial gap in serving financially underserved communities, which, if resolved, could potentially boost a country's local economy by over 30%.
In response to these challenges, fintech companies like Boost have emerged as key players in bridging the financial inclusion gap. Boost, in particular, has been making headlines across the Southeast Asian region as one of the five winners of the digital bank license granted by Malaysia's central bank, alongside its consortium partner, RHB.
Boost's upcoming digital bank is considered a frontrunner based on industry case studies of digital banks worldwide. Its advantage as an incumbent fintech player lies in its comprehensive ecosystem and proven capability to operate at scale, meeting the criteria of a successful digital bank.
Since its establishment in 2017, Boost has leveraged its holistic fintech ecosystem to empower millions of users and merchants across Southeast Asia. The company's all-in-one fintech app, merchant solutions, AI-based micro-financing business, and cross-border payment platform have played a pivotal role in its success.
Boost's AI-based micro-financing business alone has disbursed over RM2.8 billion worth of financing to MSMEs in Malaysia and Indonesia as of early 2023. Notably, despite serving a substantial number of new-to-credit customers, Boost has maintained a healthy single-digit non-performing loan rate and achieved a high repeat rate on short-term financing, with approximately 90% in both countries.
The secret to Boost's success lies in embedding digital financial solutions within the existing transaction journey and purchasing cycle of businesses. Through its digital micro-financing solutions, MSMEs can access financing through a simple 5-minute digital application process, with funds disbursed within 48 hours upon approval.
Boost's receipt of the digital bank license in Malaysia comes as no surprise, given its impressive track record and commitment to financial inclusion. As merchants and users eagerly await the launch of Boost's digital bank in the coming months, the company's continued efforts to close the financial inclusion gap are likely to have a positive impact on the region's economy.
Boost's holistic fintech ecosystem and technology have positioned it as a leader in the push for financial inclusion in Southeast Asia. Through its comprehensive offerings and proven track record, Boost is set to transform the financial landscape and empower MSMEs by providing accessible and efficient financial solutions. The launch of Boost's digital bank will undoubtedly be closely watched as it strives to further enhance the region's economic growth.