Global Symposium: Innovative Financial Inclusion By Mr. Rizal Nainy Deputy CEO (I )
Confidential SMEs : The Backbone of the Economy 97.3% 3% (645, 5,136) 136) busi usines ness establi blishm hment nts in the he count ountry ry are e SMEs Achievement High Income Nation in by 2015 2020 GDP 41% 36.3% EMPLOYMENT 65% ross all sector ors of the 65.5% SMEs Es cut ut acro he econo onomy EXPORTS 23% 17.6% 2 Source: Department of Statistics Malaysia and SME Corp. Malaysia
Confidential Financial Landscape for SMEs in Malaysia Other Avenues Financial Institutions (FIs) Venture Capitals BNM Special Funds Banking Institutions Angels (BIs) CGC Special FinTech: Guarantee Schemes - ECF - P2P - IAP MDV IP Financing (online financing) Development Financial Leasing & Factoring Institutes Government Funds Institution (DFIs) Ar-Rahnu & Pawn Broking Insts. Government Crisis Funds Microfinance Institution Mainstream Mainstream Financing Alternative Financing Financing 3
Confidential Gaps still exist in financing for start-ups & early stage Revenue HIP 3 MyULM Main /ACE Markets SME Investment - Cradle Bond market/ SME bond Partner - MDEC SME Corp. - MOSTI Debt/bridging loan - MTDC Malaysia - Biotech Private equity Corp Venture capital SME Corp. - SME Bank - MAVCAP Malaysia Business angels - MIDF - MDV - MAVCAP - BPM - MTDC Government grants - MTDC - BNM - KMP - MOSTI - MATRADE - Biotech Corp Founder Business - Biotech Corp Development Stage Seed Start-up Expansion Maturity Early stage Pre-IPO Valley of Death Lower Higher risk risk 4 Source: Securities Commission of Malaysia (prepared for SME Masterplan 2012-202)
Confidential New Market-based Funding In Malaysia, there is emergence of some new market-based funding to meet SMEs’ changing needs
THANK YOU 6
Appendix 7
Confidential Conclusion Lesson learned in forming collaborative efforts to scale up innovative financial inclusion initiatives Concern regarding the source of alternative financing to assist start-up and innovative SMEs in supporting their business growth . These companies are facing difficulties in getting financial assistance from local banks since their business and technology proposals do not have sound financial support and good guarantee. Government has offered incentives for the contribution of private sector and there is also a need to create awareness to get involvement from the private sectors, for instance in ECF platform. The need to create public awareness through the outreach programmes in partnership with other Government Agencies and industry players to build awareness on new methods of capital formation in the digital age of online interactive media . 8
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