KUALA LUMPUR: The Securities Commission Malaysia (SC) today unveiled a five-year roadmap to better position the capital market as an attractive and robust source of financing for micro, small and medium enterprises (MSME) and mid-tier companies (MTC).
The roadmap will complement existing national development policies, including the Madani Economy Framework, the 12th Malaysia Plan, the New Industrial Master Plan 2030 and the National Energy Transition Roadmap. It envisages the capital market serving the growing financial needs of MSME and MTC, potentially up to RM40 billion in 2028, complementing conventional financing avenues.
The commission said the increase of seven times of the current fundraising levels represents 46% of the compound annual growth rate over five years from RM6.3 billion in 2023.
SC chairman Datuk Seri Awang Adek Hussin said the roadmap sets out nine cross-cutting strategies and 36 key initiatives to be undertaken over the short, medium and long term based on five guiding principles. He added that the release of the roadmap reinforces the Malaysian capital market’s commitment to support the financing needs of MSME and MTC.
“In 2023, the total amount of funds raised by MSME and MTC via the capital market was RM6.3 billion. This includes fundraising through the public market, particularly the LEAP and the ACE Markets and from market segments such as venture capital, private equity, equity crowdfunding (ECF) and peer-to-peer (P2P) financing,” Awang Adek said during the presentation of the roadmap at the SC.
“SC is confident that many more will follow in their footsteps if there is a structured approach to assist them as envisaged in the roadmap,“ he added.
According to the SC, MSME and MTC have emerged as the country’s engine of growth, with MSME contributing about 38.4% of Malaysia’s gross domestic product (GDP) and 48.2% of total employment. There are about 8,500 MTC, accounting for around 36% of GDP and 16% of the workforce in 2022.
Treasury Secretary-General Datuk Johan Mahmood Merican presented the 93-page roadmap titled “Catalysing MSME and MTC Access to the Capital Market: Five-Year Roadmap (2024-2028)” on behalf of Finance Minister II Datuk Seri Amir Hamzah Azizan.
In the keynote address, he highlighted that the government aims to raise the economy’s ceiling. In the context of 1.2 million MSME, startups and MTC, this means growing them into regional champions, enhancing their ability to compete on a larger scale will raise the country’s economic output.
“The SC will look into recalibrating the LEAP Market further in widening the pool of listing advisers to include professionals and allowing alternative remuneration methods for advisers, like payment in shares to manage the cash flow requirements of listed companies, with effective safeguards in place to manage conflicts of interest. The aim is to have these new LEAP Market measures ready by early 2025,” he said.
“Building on this momentum, Credit Guarantee Corporation Malaysia (CGC) will explore and discuss with more ECF and P2P financing platforms to offer guarantees for their solutions. The aim is to have more guaranteed products that can be issued by the first half of 2024,” said Johan Mahmood.
Another major focus area is capacity building and creating a visible and sustainable pipeline of high-potential MSMEs and MTCs ready for capital market fundraising.
“As an extension to the Simplified ESG Disclosure Guide, Capital Markets Malaysia, an affiliate of the SC, will be issuing sector guides that feature enhanced disclosures for five significant sectors in Malaysia’s economy consisting of energy, transport and storage, construction and real estate, agriculture and manufacturing,” he said.
