To improve MSMEs’ access to capital market, the Securities Commission Malaysia to introduce five-year MSME Roadmap

The Securities Commission Malaysia (SC) announced that it will shortly introduce a five-year Micro, Small, and Medium Enterprises (MSME) Roadmap. The goal of this initiative is to give MSMEs more access to the capital market.

The SC stated in a statement that it is also examining the legal framework that controls how unlisted public companies (UPCs) raise money.

The SC is still dedicated to promoting Malaysia’s capital market and helping it make the shift to a low-carbon economy.

The National Sustainability Reporting Framework and the Sustainable and Responsible Investment (SRI) Taxonomy are being improved in order to direct industry players toward compliance with international sustainability standards.

With total funds raised amounting to MYR 3.8 billion ($800 million), up from MYR 3 billion ($630 million) in 2022, alternative financing activities, according to the statement, posted encouraging growth and continued to support the funding needs of MSMEs.

Since the platforms’ launch, over 15,000 MSMEs have raised more than MYR 6 billion ($1.27 billion) through equity crowdfunding (ECF) and peer-to-peer financing (P2P).

Its annual report states that as of the end of 2023, the total committed funds in venture capital and private equity were MYR 11 billion ($2.32 billion) and MYR 6.58 billion (MYR 1.39 billion) for venture capital and private equity, respectively, for a combined total of MYR 17.58 billion ($3.71 billion).

Financial institutions (12.88 percent), individuals and family offices (19.45 percent), and corporate investors (32.36 percent) are the main sources of commitments for private equity.

Sovereign wealth funds (22.55 percent), corporate investors (19.73 percent), and government agencies and investment companies (38.62 percent) are the top three sources of funding for venture capital.

By total investor commitments as of the end of 2023, Creador, Xeraya Capital, and Malaysia Venture Capital Management Bhd (MAVCAP) were the top three registered corporations.

Growth opportunities accounted for 56.63 percent of venture capital investments in 2023, with early-stage and seed opportunities coming in second and third, respectively.

Growth plays received 77.20 percent of private equity investments, with early-stage opportunities receiving 16.71 percent of total investments. Buyouts (3.14 percent) came in second.

In 2023, there were 62 venture capital and 25 private equity deals reported. Venture capital investment in target industries in 2023 was highest in financial services (18.12 percent), followed by wholesale and retail trade (13.55%) and life sciences (12.97 percent).

In terms of private equity, business services received 45.06 percent of investments in 2023, followed by wholesale and retail trade (35.15%) and transportation and storage (42.88%).

In 2023, the venture capital and private equity sectors saw the majority of their divestitures as exits during the growth stage.