LETTERS: The government's decision under the 2022 Budget to allocate more funds for alternative financing will support the needs of micro, small-and medium-scale enterprises (MSMEs), which are often underserved by financial institutions.
This push will also open up opportunities for MSMEs and businesses hit by the Covid-19 pandemic.
The allocation of RM80 million through the Malaysia Co-Investment Fund (MyCIF) to support the alternative financing market, including equity crowdfunding and peer-to-peer financing, will stimulate the economy and accelerate the MSME sector.
The RM80 million allocation is an increase from the RM50 million in 2019.
At Crowd Sense Sdn Bhd (CSSB), a peer-to-peer (P2P) operator licensed by the Securities Commission and operating under the Cofundr platform, the focus is on promoting financial inclusivity for MSMEs by improving their access to fundraising and providing innovative solutions.
We hope to play an important role in supporting MSMEs as it is our mission to raise crowdsourced financing and investment to a level beyond that of an alternative model.
Cofundr is committed to make accessibility to financing more robust, in line with the company's tagline: providing Financing That Makes Investment Sense.
Another incentive that CSSB has lauded is the introduction of 100 per cent stamp duty exemption for P2P financing over the next five years.
The stamp duty rate can be up to 0.50 per cent of the financing amount, which would cost an issuer RM5,000 for every RM1 million raised.
MSMEs raising funds are expected to save about RM5 million annually based on last year's financing volume of RM1.14 billion.
The additional MyCIF allocation and stamp duty exemption will help make P2P financing an affordable channel for MSMEs to raise funds during this economic recovery period.
Many MSMEs have benefited from Cofundr's financing programme.
In line with managing the risk of investing, Cofundr is dedicated to supporting businesses, especially those with high attention to environmental, social and government practices.
We hope MSMEs will approach us for assistance.
CSSB recently appointed Roslinda Ahmad as its head of Islamic products and services. She is tasked with introducing Syariah compliant products to the market.
Globally, MSMEs represent about 90 per cent of businesses and more than 50 per cent of employment.
However, access to funding is a key constraint to MSMEs' growth. It is the second most cited obstacle facing MSMEs to grow their businesses in emerging markets and developing countries.
The government's initiative will also help Cofundr's overall strategy by co-funding financing requests from issuers.
PAUL KUAN
Chief executive officer
CSSB, Kuala Lumpur
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times