HSBC is offering a new US$1 billion growth fund to bolster platform players within the rapidly expanding regional digital economy.
Giorgio Gamba, chief executive of HSBC Thailand, said the Asean Growth Fund, which was piloted late last year, will offer loans to companies that are scaling up through digital platforms across Southeast Asia.
The region's digital economy is growing rapidly, valued at $218 billion in 2023 and expected to reach $600 billion by the end of the decade thanks to a compound annual growth rate of 16%, he said.
"This fund aims to make it easier for the bank's customers in Asean to grow. Loan assessment via this fund does not follow the typical approach, based solely on profit and loss. Instead, we focus on the opportunities for business expansion and growth," said Mr Gamba.
"This fund will enable businesses to open loan accounts in six Asean countries from one location. For example, you can open accounts in six Asean countries from HSBC Thailand."
Krisda Phatchareon, head of wholesale banking at HSBC Thailand, said the assessment and approval of loans from this fund will shift focus from profit and loss and debt-to-equity ratio to evaluation of business potential and whether the applicant has assets that can generate future cash flows.
The loans are intended to help customers expand their operations or serve as working capital, offering reasonable interest rates, he said.
The loan size ranges from $25 million to $100 million per customer. Loan contracts typically span 1-3 years.
According to Mr Krisda, HSBC recently surveyed 600 companies operating in Southeast Asia, each with a turnover of at least $150 million, and found 42% are looking to embrace more digitalisation.
Some 40% of the companies surveyed prioritised expansion within Southeast Asia, while 37% underscored the significance of utilising technology, with a focus on R&D endeavours.
To help capture growth in the booming digital economy, the survey found 65% of respondents 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 Southeast Asia means businesses increasingly and understandably need fuss-free digital banking to support their growth. They want convenient, simple-to-use trade and payment solutions that will free up more time for them to focus on strategy and expansion," he said.
"HSBC is at the forefront of driving digital transformation in Asean, offering a range of digital transaction banking solutions such as TradePay, Omni Collect, and HSBC UniTransact, giving clients more time to focus on business priorities and development in the region."