NEVER undermine the disruptive nature of fintech as it could be a key enabler in re-building the Malaysian economy from the devastations of the COVID-19 pandemic.
Such is the opinion of the Securities Commission (SC) who will seek to drive greater adoption of digital capability to enhance capital formation efficiencies while increasing investor participation in the capital market.
“Technology is in fact one of the main thrusts of the Third Capital Market Masterplan where we envision greater use of digital capability to facilitate fundraising for companies of all sizes while encouraging market innovation and financial inclusion,” SC chairman Datuk Syed Zaid Albar noted in his opening remarks at the SC’s eighth annual fintech conference SCxSC.
“We have seen how small businesses have been badly impacted by the global response to the pandemic.”
Last year, gross domestic product (GDP) of small medium enterprises (SMEs) contracted 7.3%, sharper than the decline in Malaysia’s GDP and non-SMEs GDP which shrank by 5.6% and 4.6% respectively.
This is the first time in 17 years that the SME GDP has been lower than the country’s GDP.
However, during the pandemic, the SC noted encouraging developments where equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms continued to meet and support the funding needs of micro SMEs (MSMEs).
There are currently 21 ECF and P2P platforms registered with the SC which have collectively raised more than RM2.2 bil for close to 4,000 MSMEs since their inception.
Despite an initial decline in fundraising activities due to the movement control order in 1Q 2020, the SC stated that these alternative platforms had assisted MSMEs in raising more than RM1.3 bil in 2020.
In 1H 2021 alone, a further RM625 mil was raised through ECF and P2P, an increase of 151% and 220% respectively compared to the same period in 2020.
ECF and P2P attracted young investors with nearly 60% of participants aged below 35.
The digital asset exchanges in Malaysia also continue to thrive with over 300,000 new accounts opened this year to-date.
Since its introduction in 2019, the volume of digital assets traded has surpassed a billion with values in excess of RM16 bil as of September 2021.
New digital investment management (DIM) entrants have also contributed to the growth of assets under management (AUM) in the capital market.
As of July 2021, the eight licensed DIM operators have seen a 90% jump in new account openings compared to 2020 with nearly 75% of account holders under the age of 35.
Meanwhile, continuous demand for online brokerage services resulted in a 35% increase in new account openings during the same period. – Oct 26, 2021
