Securities Commission Malaysia (SC) today introduced six registered Peer-to-Peer (P2P) financing platform operators in Malaysia to widen funding avenues for small and medium enterprises (SMEs).
The six registered operators are B2B FinPAL, Ethis Kapital, FundedByMe Malaysia, ManagePay Services, Modalku Ventures and Peoplender. They are expected to be fully operational in 2017. This makes Malaysia the first country in the ASEAN region to regulate P2P financing. SC was also the first to put in place a regulated framework for equity crowdfunding (ECF) in 2015. As of October 2016, 11 Malaysian SMEs have raised a total of RM8 million via the six ECF platforms.
SC introduced ECF in 2015 to provide early-stage financing for start-up entrepreneurs while the P2P financing framework, introduced in April this year, aims to address funding needs of SMEs to raise working capital or capital for growth.
At its annual event “SCxSC Digital Finance Conference 2016”, Tan Sri Dato’ Seri Ranjit Ajit Singh, Chairman of SC, highlighted SC’s digital agenda in his opening address.
“SC’s digital agenda aims to achieve four key objectives, namely to enhance access to financing, increase investor participation, augment the institutional market and develop a synergistic ecosystem. Market based financing including P2P and ECF will help enhance access to financing for entrepreneurs and SME businesses in Malaysia,” said Ranjit.
To meet the investment needs of the emerging digital generation and increase investor participation, SC will also be introducing its Digital Investment Services framework in 2017. This will allow approved licensees to offer automated discretionary portfolio management which is a more cost-effective, accessible and convenient channel for investors to manage and grow their wealth.
While the SC is advocating the benefits of digital finance, the regulator is also mindful of the new forms of risks and challenges posed by technology. To address that, the SC has issued a cyber risk framework to raise wider awareness and put in place guidelines to improve industry-wide resilience.