Mitihoon – Today HSBC announced a USD1 billion ASEAN Growth Fund to help scale up platform players in the region’s booming digital economy.
**ASEAN’s digital economy to grow at CAGR of 16% by 2030**
**89% of Thai businesses plan to expand in more ASEAN markets**
Southeast Asia’s digital economy is among the world’s fastest-growing: worth USD218 billion in 2023 and expected to reach USD600 billion by the end of the decade, at a compound annual growth rate of 16%.[1]
To help the region’s digital platform players achieve economies of scale, grow their asset portfolios, and advance along the corporate lifecycle, HSBC is announcing a unique, dedicated lending fund worth USD1 billion.
“Like so many other internationally minded businesses, we are excited about ASEAN’s booming digital economy,” said Mr Giorgio Gamba, Chief Executive Officer, HSBC Thailand. “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 first-of-its-kind ASEAN Growth Fund and work with digital companies as they expand in the region and beyond.”
Mr Gamba added, “The HSBC ASEAN Growth Fund provides lending to companies that are scaling up through digital platforms across Southeast Asia. Across the region, a large number of clients have regional needs that cannot be met by solutions that focus on one jurisdiction – our ASEAN Growth Fund is intended to provide a framework to finance assets across jurisdictions. In addition, we know that profitability may not always reflect a company’s potential in its early stages. That is why we take a long-term view of potential growth by evaluating companies based on historical portfolio performance, key operating metrics, growth plans and customer acquisition strategies.”
Separately, HSBC is introducing venture debt to the Singapore market, earmarking USD150 million to provide financing to scaling, high-growth companies in Singapore that are backed by venture capital or private-equity investors.
Mr Gamba continued, “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.”
Digitalising operations
Mr Krisda Phatchareon, Head of Wholesale Banking, HSBC Thailand said that HSBC recently surveyed 600 companies operating in Southeast Asia and found that “digitalising operations” is the top business priority, selected by 42% of the respondents. This is followed by “growth in Southeast Asia” (40%) and “research and development” (37%).
To help capture growth in the booming digital economy, nearly 2 in 3 respondents (65%) plan to increase their investment in the digitalisation of their businesses, second only to “expanding into new markets within Southeast Asia” (66%).
“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,” Mr Phatchareon added.
HSBC is at the forefront of driving digital transformation in ASEAN, offering a range of digital transaction banking solutions such as TradePay[2], Omni Collect[3], and HSBC UniTransact[4], enabling clients more time to focus on business priorities and development in the region.
HSBC Thailand is committed to supporting new-economy companies in Thailand
HSBC Thailand will continue to scale-up its digital transaction banking capabilities to support businesses’ regional expansion needs. According to the recent HSBC survey, businesses in Thailand are highly confident about growth in ASEAN and are looking to expand across the region in 2024. There are 89% of Thai respondents plan to expand in more ASEAN markets and 97% say they have become more optimistic about the region than they were a year ago. Thai businesses see technology as a key factor in these expansion plans with almost two-thirds investing in technology and digitalisation. However, local technological capabilities also ranked as the top barrier to ASEAN expansion for Thai firms, underscoring the complexity as well as the opportunity with cross-border growth.
“HSBC initially opened for business in Thailand in 1888 and has been serving Thai and inbound customers for 135 years as Thailand’s first commercial bank and Thailand’s Best International Bank. With our in-depth local knowledge and understanding of the Thai people’s changing needs, the bank has been a major driving force behind Thailand’s commerce and economy. The ASEAN Growth Fund will allow us to better support new-economy companies in Thailand, whether start-ups or scale-ups, as they expand across the region and advance along the corporate lifecycle”, Mr Phatchareon concluded.
[1] e-Conomy SEA 2023 | Bain & Company
[2] HSBC TradePay is an industry first, straight-through trade finance solution that enables businesses to instantly drawdown trade loans and concurrently pay suppliers.
[3] HSBC Omni Collect simplifies collection processes by providing oversight of all sales receipts across markets through a single platform.
[4] HSBC UniTransact is a first-of-its-kind digital solution aimed at simplifying cross-border transactions with speed, cost-efficiency and transparency.
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