Malaysian MSMEs Cross MYR 1bn Crowdfunding Mark

The SC highlighted a “considerable increase” in investor participation in markets via digital investment managers, ECF and P2P platforms, digital asset exchanges and online brokers.

Malaysia’s SC (Securities Commission) has announced that over 2,500 MSMEs (micro, small and medium Enterprises) have raised more than MYR 1 billion (USD 240,000) through the country’s regulated crowdfunding markets.

Malaysia introduced its ECF (equity crowdfunding) and P2P (peer-to-peer financing) regulatory frameworks in 2016. So far, the SC has registered 21 platforms to provide regulated crowdfunding options to meet the financing needs of MSMEs.

The platforms have reportedly attracted a lot of interest from MSMEs and retail investors, which has prompted the SC to continue its support of digital innovation and inclusiveness of the capital market.

“We have seen considerable increase in individual investor participation in the market via digital investment managers (DIMs), ECF and P2P financing platforms, digital asset exchanges (DAXes) and online brokers,” SC chairman Datuk Syed Zaid Albar said at the virtual SCxSC Fintech Conference on Monday (5 October).

” Over 80 percent of the investors in the crowdfunding markets are retail investors, with 60 percent of them under the age of 35 years old.”

In 2019, the SC approved three DAXes with four digital assets permitted for trading. Collectively, more than 400,000 accounts were opened across the three DAXes, with the value of trades surpassing MYR 100 million (USD 24,000) in August this year.

Seven registered DIMs have attracted many first-time investors, with close to 90,000 new accounts opened as of August this year. This was more than double the total number of accounts opened in 2019, the SC said.

Meanwhile, the SC has revealed that demand for online brokerage services has surged, with a 270 percent year-on-year jump of new account openings as of August 2020. The average trading volume has tripled this year.