The quest for funding is probably the biggest challenge facing micro and small and medium enterprises (SME).
The ‘bankability’ factor, including track record and collateral, tend to be reasons banks shy away from giving out funding to these businesses.
Coming in to fill the gap is Wayne Lim, who saw a potential to provide an alternative financing solution through Qu Exchange, an app that allows SMEs to pledge and exchange products and services – akin to a ‘barter’ system.
“This platform allows SMEs to buy each other products and services using a trade point system that is called ‘Qu point’,” says Lim.
Upon signing up, an SME will receive 30,000 Qu points, after its credit and business viability is evaluated.
“They will have to agree to deliver RM30,000 worth of products and services on the platform, and the 30,000 Qu points they receive from us may be used to purchase anything they need from the platform.”
“It is just like a marketplace - but no cash involved,” he explains.
“It is just like a marketplace - but no cash involved,”
Managing cash flow is often biggest challenge for SMEs, says Lim, but what they do often have in access are their products and services. So, why not put them up on the platform and exchange them for the items and services they need instead?
“We have an external auditor that works independently to audit the SMEs that has pledged in the exchange.”
“We make sure the transactions are equal to the Qu point issued. It is important that every point we issue are backed by the same value of products and service on the platform,” says Lim.
The idea to develop Qu Exchange came about in 2015. By then, 45-year-old Lim had developed an acute understanding on challenges facing SMEs.
Hailing from a small town in Muar, Lim started his career selling ad spaces for Yellow Pages Singapore. He noticed that over 90 percent of advertisers were SMEs.
In 2005, Wayne started a publication company dedicated to SMEs, and after 14 years of working closely with SMEs, Lim knew it was time he played a bigger role in helping these small them.
After two years of research, helped with two-interns, he launched the Qu Exchange app in September 2017.
“We have a great understanding about their (SMEs) challenges. We knew we had to take a step further in empowering these ‘small guys’.
“Today’s environment is just too competitive for these small guys to stand on their own feet. So, we came up with this system, so they can trade and help each other.” says Lim.
The app has over 2,800 users with an average of 250 transaction a month.
“Our vision is to empower the micro SMEs and the B40 (bottom 40 percent). We want to make them sustainable. We want them to prosper. I know it is tough but if we get this right, I believe it can benefit them greatly,” says Lim.
The next step for Qu Exchange, he adds, is to extend the usage of the points to employees of the SMEs registered on the platform.
The reason we want to do this is because we know that most of the workforce in the SME sector are usually low-income earners. SMEs employ up to 60 percent of the total workforce in Malaysia. That is a big number,” says Lim.
He plans to roll out this new feature in April 2019.
“These workers are usually struggling and don’t make enough money. So, if we allow the SMEs to allocate Qu points to their employees, they can use it to buy groceries,” he adds.
Along with the ‘point for employees’ feature, Lim also plan to introduce productivity tools such as accounting, payroll, sales and key performance indicator (KPI) tools on the exchange.
“Usually, SMEs are not digital or software savvy. We are going to include these softwares to help them increase their productivity, and everything will be on a single platform,” he explains”
Lim has big plans. He hopes to roll out Qu Exchange across the region.
“There are over 60 million SMEs across ASEAN and I believe this can be done.”
“We want to make sure that one day, this app will not only serve Malaysia’s SME but the whole SME ecosystem across ASEAN,” says Lim.