FOLLOWING a media briefing that discusses Malaysia Debt Ventures Bhd’s (MDV) Technology Industry & Market Development Action Plans for the rest of the year and beyond, the company announced its commitment to expediting its efforts in supporting the Government to ensure the technology sector is well-equipped to navigate the post-pandemic recovery period.
MDV chairman Khairul Azwan Harun pointed out that five key initiatives that the company is planning to implement in order to strengthen its role in developing the technology sector.
One of the immediate initiatives that will be undertaken by the Company is to extend the moratorium granted to some of MDV’s affected customers.
The implementation of the moratorium by MDV since the start of the movement control order (MCO 1.0) in 2020 had benefitted 66 companies with total approximate deferments of RM134.30 mil comprising principal and profit payments.
During the same period last year, MDV also introduced the Liquidity Financing for Technology Start-Ups (LIFTS) facility (previously known as TSFRF), which is a RM100 mil special programme for technology companies who were badly hit by the COVID-19 pandemic.
So far approved more than RM74 mil in financing for 64 companies and has disbursed approximately RM33.50 mil to 35 companies in various technology sectors under this programme.
On this, MDV CEO Nizam Mohamed Nadzri said that entering this post-pandemic recovery phase, an increasing number of technology start-ups and micro, small and medium-sized enterprises (MSMEs) would require access to immediate and affordable financing assistance for them to rebuild their business capacity and profitability.
“To assist these companies, MDV has proposed to the Government, to expand the LIFTS programme with an additional RM100 mil in funds. This programme, dubbed as LIFTS 2.0, will focus on providing affordable financing to eligible technology start-ups and MSMEs to implement their growth and development plans in achieving their post-pandemic growth potential,” Nizam explained.
As part of MDV’s funding diversification strategy, the company will be moving away from government-guaranteed bonds and sukuk, and looking to source its new RM2 bil bond/sukuk programme sometime in November directly from the capital market.
This will be MDV’s fourth fund, which also marks MDV’s first fund to be raised based on its own standalone credit rating.
Furthermore, in its capacity as a provider of venture debt financing for venture capitalist (VC)-backed start-ups, MDV has received the approval by the MOF to establish a venture capital company (VCC) and a venture capital management company (VCMC), enabling MDV to create better financing opportunities for early-stage technology-based start-ups and companies, typically in between the Seed and Series A funding cycle.
A VCC would provide a more efficient platform to collaborate with various parties for the purpose of setting up venture debt funds as an alternative investment asset class for investors, while a VCMC would allow MDV to carry on investment management activities and provide management and administrative support services and resources on behalf of the VCC.
Nizam added that another significant initiative planned by MDV is to establish a National Technology Financing Hub at Technology Park Malaysia (TPM), which focuses on serving the needs of start-ups such as incubators and accelerators, to complement the Technology Commercialisation Agency (TCA) under MOSTI in accelerating technological innovation in the country.
“We envision that the hub will also function as a Centre of Excellence (COE) for Venture Finance, which will provide support and assistance to start-ups for them to enhance their skills and technical knowledge further as part of the process of growing their businesses.
“The hub also aims to provide infrastructure support such as shared office spaces and training centres that will contribute to the strengthening of the start-up ecosystem in Malaysia,” he said. – Oct 30, 2021
