HSBC has unveiled a $1 billion (RM4.7 billion) Asean Growth Fund aimed at supporting the expansion of platform players within the rapidly expanding digital economy of the region. According to the bank's statement, Southeast Asia's digital economy is one of the globe's swiftest-growing sectors, valued at $218 billion (RM1 trillion) in 2023 and projected to surge to $600 billion (RM2.8 trillion) by the decade's end, with a compound annual growth rate of 16%.
Consequently, HSBC is introducing a specialized lending fund of $1 billion to aid digital platform players in the region in attaining economies of scale, expanding their asset portfolios, and progressing through the corporate lifecycle. Amanda Murphy, who serves as the head of Commercial Banking for South and Southeast Asia at HSBC, expressed the bank's enthusiasm for the flourishing digital economy in ASEAN, aligning with numerous other globally-oriented enterprises.
“With a working population that is digitally native, increasing in size, and poised to consume more goods and services, especially on e-commerce, Asean has so much potential for growth. We are delighted to launch our Asean Growth Fund and work with digital companies as they expand in the region and beyond”, she added.
The HSBC Asean Growth Fund offers lending opportunities to businesses expanding via digital platforms throughout Southeast Asia. It assists both emerging and established entities in the new economy sector, as well as non-bank financial institutions, by evaluating operational indicators linked to their cash-flow-generating asset portfolios rather than solely relying on conventional financial measures. Additionally, the bank is launching venture debt services in the Singaporean market, allocating $150 million to provide financing to rapidly growing companies in Singapore supported by venture capital or private equity investors.
Murphy continues, “HSBC has a proud history and strong heritage in Asean of supporting entrepreneurs and scaling up businesses. The introduction of our latest offerings allows us to better support new-economy companies in Asean, whether they are start-ups or scale-ups, as they expand across the region and advance along the corporate lifecycle”.
In a recent survey conducted by HSBC, 600 companies operating in Southeast Asia revealed that "digitalizing operations" ranked as their top business priority, chosen by 42% of respondents. This was closely followed by "growth in Southeast Asia" at 40% and "research and development" at 37%. In order to seize opportunities within the thriving digital economy, nearly two-thirds of respondents (65%) plan to boost their investment in digitalizing their businesses, ranking second only to "expanding into new markets within Southeast Asia", which garnered 66%.
According to Murphy, “Rapid digital adoption in ASEAN means businesses increasingly and understandably need fuss-free digital banking to support their growth. “They want convenient and simple-to-use trade and payment solutions that would free up more time for them to focus on strategy and expansion”, she added.