Malaysia-based fintech firm CGC Digital, Singapore-based financing platform Funding Societies | Modalku, and Malaysia-based agricultural digital service firm FarmByte have teamed up to support agricultural financing in Malaysia.

The trio said in a statement on Wednesday that they have signed a memorandum of understanding (MoU) aimed at narrowing the financing gap for micro, small, and medium enterprises (MSMEs) in the agriculture segment.

This strategic collaboration seeks to enhance access to financing and support the growth of agricultural businesses, thereby contributing to Malaysia’s food security agenda and economic resilience.

Through this MoU, the trio will leverage their combined expertise to implement innovative financing solutions that address the unique needs of MSMEs in the agriculture sector.

CGC Digital will play the key role of mitigating risks as a leading credit guarantee provider and enhance its probability of default model with farm-level data as an alternative risk measurement for agribusinesses, thereby de- risking lending and improve access to financing through data-driven credit evaluations.

Funding Societies, will provide fast, flexible funding solutions utilizing alternative credit assessments to serve underserved farmers and agribusinesses that may lack traditional collateral.

FarmByte will contribute farm-level data and insights to enhance credit scoring models, improving risk evaluation and financial inclusion.

“This partnership with CGC Digital reflects our shared commitment to empowering underserved businesses across Malaysia,

“We strive to build a more inclusive financing ecosystem that fuels the growth of micro and small enterprises,” said Wong Kah Meng, Group Chief Operating Officer of Funding Societies.

“By integrating CGC Digital’s expertise in credit enhancement with Funding Societies’ advanced digital financing platform, on the back of Farmbyte’s agricultural ecosystem, we aim to empower farmers and agribusinesses with greater access to capital that they need to expand, create jobs, and drive economic progress,

“This collaboration not only strengthens the agricultural value chain but contributes to food security and economic resilience in Malaysia,” he added.

According to the statement, the collaboration between CGC Digital, Funding Societies, and FarmByte aims to have positive impact on local farmers.

By providing innovative financing options, local farmers will have better access to the capital needed for sustainable operations and business expansion.

Improved financial literacy and access to modern agricultural technologies will enhance farmers’ productivity and efficiency.

Implementing risk assessment and management strategies will also help farmers manage uncertainties related to climate change and market fluctuations.

The focus on sustainability will ensure that farming practices are environmentally friendly and economically viable in the long term.

By addressing the financial challenges faced by farmers, this collaboration will empower them to become more resilient and self-sufficient.

It is noted that food security remains a critical concern for Malaysia as the nation grapples with challenges such as climate change, urbanization, a growing population and reliance on imported food.

Despite the importance and urgency to address food insecurity issues, MSMEs in agriculture sector face significant hurdles in securing financing to grow their businesses and to enhance productivity.

Many small-scale farmers lack the necessary collateral to secure traditional loans, which further limits their access to financial resources.

A gap in financial literacy among farmers also hinders their ability to navigate complex financing options effectively.

Furthermore, agriculture segment is often perceived as a high-risk sector due to its vulnerability to climate change and market volatility, making financial institutions hesitant to extend credit.

“At CGC Digital, we are deeply committed to supporting initiatives that address the critical issue of food security in Malaysia,

“By collaborating with Funding Societies and FarmByte, we aim to close the funding gap and enable local farmers with financial access they need to thrive,” said Yushida Husin, Chief Executive Officer of CGC Digital.

“We believe that leveraging farming data as an alternative credit scoring metric will not only enhance the accuracy of credit assessments but also provide a more inclusive and supportive financial ecosystem for our agricultural MSMEs,

“This collaboration is a significant step towards building a resilient and sustainable agricultural sector that can meet the growing demands of our nation,” he added.

According to Syed Aiman Kifli Syed Jaafar, Chief Executive Officer of FarmByte, the partnership with CGC Digital and Funding Societies aligns with the company’s vision to
revolutionize farming by providing farmers with both financial and technological resources.

“Our goal is to empower MSMEs in the agriculture sector with greater access to financing, enabling them to scale their businesses and enhance productivity,

“Through this collaboration, we are bridging the financial gap and equipping agropreneurs with the resources and support needed to drive a more resilient and sustainable agrofood ecosystem,” he added.

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