Alternative financing options

MyCIF To Continue Alternative Financing Support For Micro And Small Businesses

If you are operating a small or micro business, you may have come across equity crowdfunding (ECF) and peer-to-peer financing (P2P) platforms offering financing options.

Unlike traditional financing offered by banks, ECF and P2P financing are quite new to most Malaysians small business owners and many may not want to get into it because its still considered alternative financing. But if the government is also putting money into it, that helps pave the way for micro, small and medium enterprises (MSMEs) to get involved.

The Malaysia Co-Investment Fund (MyCIF) was established in 2019 by the government to provide co-investments alongside private investors on the ECF and P2P platforms and has helped local MSMEs raise more tha RM2.7 billion in financing in the last two years.

According to the MyCIF annual report 2021 released by Securities Commission Malaysia (SC) recently, the fund has successfully accumulated a net return of RM4.6 million while helping over 2,200 MSMEs to get investment financing in this private-public sector co-investment initiative.

“With the continued support of MyCIF, ECF and P2P markets continued to growth in 2021 with 74% and 122% increase in total fundraising for both markets respectively, as well as 33.3% and 48.6% increase in the overall number of successful campaigns and participating issuers in 2021,” MyCIF highlighted in its 2021 Annual Report summary statement.

“Additionally, Social Enterprises that has utilized the MyCIF-Social Enterprise schemed successfully fundraised approximately RM5.2 Mn via 28 P2Pcampaigns, with zero default rate,” the statement added.

MYCIF also reported that it had successfully launched the pilot program to facilitate financing for informal sector in partnership with Funding Societies, a P2P financing operator. The fund will co-invest in campaigns within the informal sector on a 1:1 co-investment ratio. This means MyCIF will invest RM1 for every RM1 successfully raised from private investors on the Funding Societies platform.

For 2022, the fund is paying special attention to MSMEs that are related to the agriculture sector which has been identified to be of strategic importance to the Malaysian economic recovery.

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