The company is operated by Malaysian-born Kelvin Teo and Indonesian Reynold Wijaya, graduates of the Harvard Business School.
In less than two years, it has arranged more than 360 loans worth a total of US$19 million (RM84,464,500), according to a report in the Nikei Asian Review (NAR).
The peer-to-peer lending system allows individuals to lend and borrow money directly from each other online instead of borrowing from banks.
Funding Societies, a fintech startup operating in Indonesia and Singapore, will soon be in Malaysia.
When checking the creditworthiness of potential borrowers and calculating the interest rates for their loans, the company does not depend entirely on their financial statements.
It also uses psychometric tests intended for small businesses, a tool first developed through research at Harvard, according to the NAR report.
The duo received a major boost when their business idea drew the interest of Piyush Gupta, chief executive of DBS Group Holdings, one of the largest financial groups in Southeast Asia.
The NAR report said Gupta agreed to collaborate, giving the startup the backing of an established player.
Teo hopes to make his business the most trusted peer-to-peer platform in Southeast Asia.
Johor-born Teo was quoted by NAR as saying that Malaysia’s preferential treatment for Bumiputeras had pushed him to work harder.
After studying at the National University of Singapore Business School, he landed jobs with major US and European consultancies which took him across Southeast Asia.
He noticed that entrepreneurs and small and midsize enterprises with the drive and ability to start new businesses had problems getting bank loans.
“Having worked with both banks and startups, I realised there is a huge gap in SME financing, because of the lack of collateral, or because they did not [meet] banks’ internal standards,” he told NAR.
He quit his job and went to study at Harvard, where he met Wijaya.
Noting the peer-to-peer lending system rapidly growing in the US, the duo founded Funding Societies, launching their business even before graduating.