Wetek to work with XOX for micro-financing business in Southeast Asia

Wetek Technology (M) Sdn Bhd is introducing micro-financing in Southeast Asia (SEA) and we expect the amount could exceed RM2 billion for a start and it may also partner XOX Bhd for this.
XOX is already a partner with Wetek to introduce micro-financing in Malaysia to the tune of RM1 billion for entrepreneurs and small business owners. A second tranche may be introduced later depending on the demand.

Wetek director Howard Leung Hao issued a statement yesterday and said that it aims to be a market leader of micro-financing in Southeast Asia.

Globally, the microfinance industry had serviced 139.9 million borrowers in 2018, and 65 per cent of microfinance borrowers live in rural areas where traditional banking and lending is difficult or impossible.

Leung Hao said according to Microfinance Barometer 2019, this industry has been growing at an annual rate of 11.5 per cent over the past few years and projected to reach US$146.8 billion by 2021.

“There is a huge opportunity for Wetek to grow in this business,” he said.
The micro-financing business in Malaysia will be available to all existing XOX subscribers, which currently stands at 2.2 million.

XOX’s subsidiary, XOX Media Sdn Bhd has inked a partnership agreement with Wetek, which has committed RM1 billion in financing for this.

Wetek is working with XOX as it has an e-wallet licence, and a strong subscriber base of 2.2 million, which could double by the end of this year as the company embarks on several initiatives.

A year ago XOX had proposed a rights issue with free warrants to raise up to RM66 million to fund its e-wallet and electronic SIM (e-SIM) businesses expansion.

XOX allocated RM33 million of the proceeds raised from the rights issue to expand its e-wallet function by developing a new mobile application to support micropayments, the issuance of Mastercards and peer-to-peer e-money transfers.

Some RM15 million was set aside for its e-SIM expansion as an alternative to the traditional SIM cards. These initiatives, among others, are drawing customers to XOX.

The NST quoted XOX CEO Ng Kok Heng who said the company aims to provide micro-financing to small business owners and individuals access to capital for expansion and it seems now a lot of enquiries have come in.

“Wetek is working in partnership with XOX as we have the e-wallet licence to carry out microfinancing. Micro Financing will be a growing business for both XOX and Wetek. It will also improve the bottom-line of the company. We expect by the end of this year XOX will double its existing subscriber base and this would provide more business opportunities for us to expand in micro-financing. We have several on-going initiatives and our subscriber count is increasing day-to-day,” he said.

A check on Leung Hao and the other director of Wetek, who is Liang Zeng shows the two have strong credentials.

Leung Hao is the chairman and CEO of Brilliant (Hong Kong) Holdings Ltd and he looks after the overall strategic and international business development for the company.

He started his career in the 1990s in the IT and mobile internet industry and founded Beijing Ruidong Technology Co. Ltd in 2013.

Leung Hao has an eye of identifying market opportunities across the globe with experience managing a cross-cultural team of management. He is also a supporter of start-ups as he believes in the opportunity with young people and great ideas.

So when he saw the opportunity to build the micro-financing business in Malaysia, he quickly got XOX as its partner.

Liang Zeng is an internet entrepreneur and venture capitalist. He invests and incubates the companies in digital marketing, artificial intelligence and enterprise services.

He has held senior positions as senior vice-president (VP) of Kingdee International Software Group, VP of Microsoft Greater China, and most recently, VP of Baidu Inc. and CEO of Baidu Nuomi.

Liang Zeng also serves as board director and strategic advisor for multiple digital marketing and technology companies.

XOX performed well this morning despite a sluggish market. The stock rose as high as 12.5 sen at 10 a.m. We hope there will be better performance in the afternoon today.

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