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Malaysian regulator introduces P2P loan firms for SMEs

Nayela Deeba | Nov. 4, 2016
The Securities Commission Malaysia will also introduce a Digital Investment Services Framework and issue a cyber risk framework.

The Securities Commission Malaysia (SC) has introduced six peer-to-peer (P2P) financing platform operators to help small and medium-sized enterprises (SMEs) with finances and funding.

The registered operators - which are expected to be fully operational in 2017 - include FinPAL, Ethis Kapital, FundedByMe Malaysia,  ManagePay Serices, Modalku Ventures and Peoplender.

SC has also implemented a P2P financing framework for equity crowdfunding (ECF) last year to address the funding needs of SMEs, which mainly wish to increase their capital funding. As of October 2016, 11 Malaysian SMEs managed to raise RM8 million via the six ECF platforms.

"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," highlighted Ranjit Singh, Chairman of SC during the SCxSC Digital Finance Conference this year.

Apart from funding capabilities, SC will introduce a Digital Investment Services Framework in 2017 to allow approved licensees to offer automated discretionary portfolio management that is more cost effective, accessible and convenient for investors.

To further address the challenges posed by technology, SC will also issue a cyber risk framework and implement place guidelines to improve industry-wide resilience.

 

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