MADCash, a Malaysia-based fintech startup focused on providing zero-interest micro-funds to women entrepreneurs, has raised RM5 million (S$1.5 million) in pre-Series A funding, it announced on Tuesday (Oct 3).

Venture capital firm Artem Ventures led the round, which also had participation from MSW Ventures and ScaleUp Founders Fund.

The funds will go towards improving MADCash’s online platform, which uses artificial intelligence; it will also help foot operational and marketing costs, and fund the expansion of the startup within South-east Asia.

MADCash, founded by managing director Nuraizah Shamsul Baharin, has brought on board Musyrifah Malek as a co-founder. She will be in charge of improving the startup’s corporate governance policy and practices, given her legal background.

The startup provides unbanked and underbanked female entrepreneurs with small loans averaging RM3,000. These micro-funds can go up to RM5,000, MADCash told The Business Times. It aims to provide an alternative credit scoring programme to enhance the entrepreneurs’ future bankability.

“Supporting the unbanked and underbanked has been a digital economy problem looking for a sustainable solution, especially in the development economy of micro-financed entrepreneurship,” said Jeffrey Seah, general partner at MSW Ventures.

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Funds under management at MADCash grew from US$20,000 in 2022 to US$700,000 in August 2023, with the biggest injection from Maybank under iTekad, a social finance and investment initiative programme by Malaysia’s central bank, said MADCash.

The startup said it is on track to support more than 800 women by the end of this year, with partners such as Hong Leong Islamic Bank and Malaysian national payments network PayNet.

“MADCash recognises the importance of financial inclusion for closing the gap of poverty and gender inequality, which can lead to better economic growth in the South-east Asian region,” said Tunku Omar Asraf, principal of Artem Ventures.