PETALING JAYA: The Malaysia Digital Economy Corporation (MDEC) has entered into a partnership with seven crowdfunding operators to help entrepreneurs tide over the economic challenges brought on by the Covid-19 onslaught.
The seven operators which have come forward to support the initiative are: Ata Plus, CapBay, Crowdplus Asia, Eureeca, Funding Societies, microLEAP and pitchIN.
In a recent survey by the Malaysian Global Innovation and Creativity Centre (MaGIC) involving 239 startups, 35.1% of the respondents said they needed loans, 23.8% asked for grants or subsidies and 3.8% asked for deferment in repayments.
MDEC’s CEO Surina Shukri also noted that 74.9% of those surveyed are unsure or unaware of auxiliary financial support and incentives made available for entrepreneurs, and it is actively trying to close that gap.
“While the general business community lauds the recent RM10 billion financial lifeline for micro-entrepreneurs and SMEs, MDEC is mindful many entrepreneurs may not be successful in obtaining government grants and other financial aid.
“As such, our has been relentlessly exploring alternative financing avenues and making these options known to businesses that are struggling to stay afloat during these trying times,” she said.
In this funding initiative, the agency is supported by the Registered Digital Market Association (RDMA) with members comprising equity crowdfunding (ECF) and peer-to-peer financing (P2P) operators that are registered by the Securities Commission of Malaysia.
Under the initiative, ECF enables groups of investors to fund businesses by taking up stakes in the investee companies for investment, whereas P2P involves funds being lent at a fixed interest rate over a fixed tenure.
“In these unprecedented economic conditions, conventional loans with collaterals will further burden businesses whereas ECF and P2P online platforms are able to swiftly meet the critical financing needs of businesses, particularly for MSMEs,” said RDMA president and Ata Plus co-founder, Elain Lockman.
Entrepreneurs who wish to explore this alternative financing option may do so by submitting an expression of interest online. This drive will run from April 9-24 and MDEC will offer priority assessment to all applicants by expeditiously screening their eligibility before submitting the profiles to the applicants’ choice of ECF/P2P operator.
In addition, MDEC’s Global Growth Acceleration Division vice-president Gopi Ganesalingam said his division will also be engaging the founders of MSC-status companies and other high-net-worth-individuals to pay-it-forward as investors on these digital financing platforms.