The 2021 budget should stimulate investments in alternative financing platforms
PETALING JAYA: The 2021 Budget Matching Investment Fund for Peer-to-Peer Lending (P2P) and Equity Crowdfunding (ECF) platforms will encourage the public to invest and help boost small and medium-sized enterprises (SMEs), the officials said. industry players.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said a matching investment fund of RM 50 million will be made available to P2P and RM 30 million to ECF.
The budget also aimed to encourage investment in the ECF by giving investors a 50% tax break for their investments, capped at RM50,000.
Registered Digital Market Association (RDMA) chairman and Ata Plus co-founder Elain Lockman said operators welcome the 50% tax exemption because they have been asking for the incentive for three years.
She said this would encourage more individual investors to embrace the asset class, while the RM30mil co-investment fund demonstrates the government’s confidence in the potential of Malaysian SMEs and startups.
âThese investments will be beneficial for the country because SMEs are the backbone of our economy. When SMEs raise funds, jobs are created and, in the end, these companies will contribute to national funds, âshe said.
RDMA includes members of ECF and P2P operators registered with the Securities Commission.
Funding Societies co-founder and CEO Wong Kah Meng said alternative financing options are important for SMEs, many of which need support to overcome the MCO period.
During his budget speech, the Minister said that P2P funding has proven to be an innovative alternative source of funding, generating over RM 900 million in funds for SMEs.
Asked about the budget’s emphasis on invoice-based P2P platforms, Wong said this is a key product because the short duration and low risk are attractive to investors. .
Pitch Platforms Sdn Bhd co-founder and chief strategy officer Kashminder Singh expected the move to encourage more investors to embrace ECF platforms, even if they aren’t investing large sums of money. .
He noted that the RM50,000 cap reflected the guidelines set by the SC for retail investors.
Both platforms allow individuals to invest small amounts to finance a business.
In return, an ECF investor will get a small stake in the business while a P2P lender will be repaid in installments with interest.