The deal gives FFG control of a certified lending licence in the Malaysian market.

Tech venture firm FatFish Group (ASX:FFG) has taken another step forward as it establishes a BNPL footprint across major south-east Asian markets.

The company announced this morning that it’s acquired an 85 per cent stake in Forever Pay Sdn. Bhd, a lending platform based in Malaysia.

Importantly, Forever Pay has been awarded with a lending licence by Malaysia’s Ministry of Housing and Local Government, giving FFG an immediate competitive advantage in the Malaysian market.

Strategic transaction

 The lending licence gives Forever Pay approval to offer financing services for “businesses for consumers and corporates, including retail BNPL services”, FFG said.

Via Forever Pay, FFG will launch its expansion into the retail BNPL sector in Malaysia, as well as other consumer-facing digital finance products.

FFG said it will also look to drive regional synergies now that it holds controlling stakes in Forever Pay as well as the Singapore-based Smartfunding Pte Ltd.

Through its strategic partnership with point-of sales (POS) software provider KryptoPOS, Smartfunding already has distribution access to more than 5,000 merchants and 15 million consumers in Malaysia and Indonesia.

In addition, Forever Pay will be able to leverage FFG’s existing infrastructure and expertise in areas such as KYC (know your customer) technology, credit assessments and digital marketing, the company said.

Addressable market

By obtaining control of a Malaysian-issued lending licence, FFG said the Forever Pay acquisition is an “important milestone” as it looks to capitalise on one of the fastest-growing regional markets in south-east Asia.

Citing February 2021 research from Comprar Acciones, FFG said demand for BNPL services is expected to grow by around 400 per cent through 2025 to $US250 billion.

FFG will acquire Forever Pay in a cash and shares deal for a total consideration of $870,000, comprising $450,000 cash to be paid in instalments over the next 12 months.

The remainder will be financed via the issue of 3 million FFG ordinary shares priced at 14c each – a premium to its Friday closing price of 12c.

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.