Shoraka Digital Ventures, FSC Inks MoU to Develop First Digital Marketplace for Co-op Ecosystem
KUALA LUMPUR: Shoraka Digital Ventures (SDV), via their unit Shoraka Ventures Sdn Bhd, signed a memorandum of understanding (MoU) with Federal Financial Services Cooperative Malaysia Bhd (FSC) to develop an inter-cooperative market, the first digital marketplace for cooperatives ecosystem.
The inter-cooperative market is a digital marketplace for cooperatives that will connect those in need of short-term funding with those who have excess short-term cash to help them better manage their liquidity. The formation of FSC aimed to unite all credit and ArRahnu cooperatives under one entity, with Co-op Bank Pertama Bhd (CBPB) leading the way under the Cooperatives Act 1993.
SDV managing director Johar Amat said the cooperative ecosystem currently lacks a platform that helps to match those in need of short-term funding with cooperatives that have excess in short term cash to enhance their liquidity management, ala interbank market. He said currently, most cooperatives tap on financial institutions such as banks for working capital financing and short-term deposit placement.
“With the inter-cooperative marketplace, we create an ecosystem that enhances access to funding for cooperatives at a lower cost and potential higher deposit returns for those with excess in cash.”
“It is a platform from ‘Koperasi to Koperasi’ where resources are kept within cooperatives ecosystem that empowers the cooperatives to a balanced, inclusive, progressive and sustainable socio-economic growth,” Johar said in a statement today. SDV, a private equity firm focused on Islamic fintech startups, is part of the Shoraka Group, founded in Dubai in July 2006 to empower people through Islamic financial solutions.
According to Johar, fixed deposits with banks would yield an average return of around 1.9 per cent per year, while cooperatives requiring bank working capital funding would have to pay an average interest rate of approximately 4.9 per cent per year.
“This differential of around 3.0 per cent per annum is a leakage from the ecosystem, and we believe it can be reduced through the inter-cooperative marketplace,” Johar said.
Johar foresees a vibrant marketplace where funds would be utilised within the ecosystem, which would further propel the cooperative movement to the next level. More than six million cooperative members across the country would eventually benefit. The inter-cooperative marketplace is a disruptive fintech business model that will catalyse funding sources and digital services for the cooperative movement.
Source: NST Business Times
