Fatfish subsidiary gets coveted full digital lending license in Malaysia

Fatfish subsidiary SF Direct Sdn Bhd obtains full digital lending licence in Malaysia
The tech venture firm is positioning itself to capitalise on opportunities within Southeast Asia digital lending sector
Company’s near-term focus also remains on incubating its social gaming offering in Asia

Special Report: Tech venture firm Fatfish Group says its subsidiary SF Direct Sdn Bhd (SF Direct) has obtained a full digital lending license from Malaysia’s Ministry of Local Government Development after being granted a conditional approval.

Fatfish Group (ASX:FFG) says very few licenses authorising digital money lending activities have been ever approved in Malaysia, with stringent requirements being set by local regulators.

FFG has an interest in SF Direct via its 86% owned ASEAN Fintech Group (AFG). AFG owns 85% of SF Direct, which it acquired in 2021.

The company says the granting of the full digital money lending in Malaysia complements the other licenced financial service operations owned by AFG, predominantly operating in Singapore.

Capitalising on Southeast Asia growth in digital lending

FFG says Southeast Asia continues to see consumers adopting digital financial services at a rapid pace.

The region’s digital lending is the single biggest driver of digital financial services (DFS) revenue which grew at a CAGR of 46% from 2021 to 2023.

FFG says Malaysia’s digital lending loan book balance grew 25% from US$8 billion in 2022 to US$10 billion in 2023 and is projected to grow at a CAGR of 27% up to 2025.

FFG CEO Kin W. Lau says the strategic move for SF Direct to obtain the licence in Malaysia will allow the company to capitalise on the burgeoning opportunities within the region’s digital lending industry.

“Obtaining this full digital license for SF Direct will significantly enhance the FFG’s digital lending footprint in Malaysia and the wider ASEAN region,” Lau says.

“Fatfish Applied AI Labs, FFG’s recently announced generative AI business unit, is also expected to add significant value to SF Direct including through automation of business processes in service delivery.”

FFG has invested a total of US$9.16 million in AFG, which has funded the development of operating businesses in embedded finance generating more than US$1.6 billion in gross transaction value (GTV) in 2023 alone in its fintech business.

AFG-owned operations include digital insurance platform Fatberry, Singapore-licenced money lender Smart Funding and payments processing business BetterPay.

Social gaming project remains a focus

While expanding its money-lending operations, FFG’s near-term focus remains on incubating its social gaming offering in the Asian market which its sees as significant growth potential.

FFG recently appointed ex Virtual Gaming Worlds executive Rhys Campbell as director of social gaming to oversee this segment of the company.

According to the company, social gaming is a rapidly growing and ever-evolving sector within the global video-game industry and forecast to grow from US$12 billion in 2012 to US$36 billion in 2027.

In Australia, FFG says, there are several successful social casino gaming companies including VGW, Stake.com, Aristocrat Leisure (ASX:ALL) and Ainsworth Game Technology (ASX:AGI).

This article was developed in collaboration with Fatfish Group, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.