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MDEC partners with crowdfunding platforms to ease SMEs cash flow

Image Credit: https://mdec.my/news/digitalvscovid-crowdfunding-campaign/

The Malaysia Digital Economy Corporation (MDEC) has partnered with seven crowdfunding operators in an effort to support SMEs and entrepreneurs.

The main focus will be to garner financial support to help SMEs navigate cash flow and working capital challenges the pandemic has brought about.

Earlier, MDEC had launched another similar initiative with crowdfunding platforms to raise funds for frontline workers fighting the COVID-19 pandemic.

MDEC also kicked off a campaign where 80 Malaysian tech companies have offered services on a pro-bono basis or discounted rates to SMEs during this period of economic uncertainty.

Of 239 startups polled in a survey by the Malaysian Global Innovation and Creativity Centre (MaGIC), 35.1% said they needed loans, 23.8% preferred grants or subsidies while 3.8% were looking for ways to defer repayments.

Surina Shukri, CEO of MDEC, shared almost 75% of the respondents were either unsure or unaware of auxiliary financial support and incentives that were available for entrepreneurs.

He said that MDEC is proactively working to fill in these gaps and ensure that entrepreneurs and startups were made aware of initiatives that have been implemented to support them.

The business sector has been very receptive to the RM 10 billion financial lifeline for micro-entrepreneurs and SMEs.

None the less, MDEC is also aware that many entrepreneurs may not be successful in obtaining government grants and other financial aid.

To mitigate this, the Global Growth Acceleration Division of MDEC has been looking other fiscal options that could help struggling businesses successfully navigate these perilous waters.

The first funding initiative led by MDEC’s Global Growth Acceleration Division was the Meet Your Match Malaysia. A virtual investor-matching initiative with KK Fund Pte. Ltd., it drew 90 global investors and 75 promising local startups seeking to raise almost USD 100 million in investments.

For the current funding initiative, MDEC has obtained support from 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.

Equity Crowdfunding (ECF) facilitates groups of investors to fund businesses by getting stakes in investee companies.

Peer-to-Peer Financing (P2P) focusses on generating funds that are loaned to companies at a fixed interest rate for a fixed period.

Both platforms have had much success in Malaysia, grown rapidly since their start. As of end-December 2019, the financing platforms had collectively raised over RM700 million and benefitted close more than 8,000 micro, small and medium enterprises (MSMEs).

The other ECF/P2P operators working with MDEC are Ata Plus, CapBay, Crowdplus Asia, Eureeca, Funding Societies, microLEAP and pitchIN.

MDEC is facilitating the process by offering priority assessment for all applicants. They will help applicants to ensure they meet eligibility criteria before applications are submitted to the chosen ECF/P2P operator.

Since the enforcement of the movement control order, MDEC has developed a dedicated microsite for its #DIGITALvsCOVID movement.

Interested parties can visit https://mdec.my/digitalvscovid/ to learn more about MDEC’s digital initiatives and tech relief services offered to mitigate the social and economic impact of COVID-19.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

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SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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