1-2 October 2024
Kuala Lumpur, Malaysia
FinTech Summit
Welcome Remarks at the SCxSC Grow Roadshow and Bioeconomy Corporation Conference

Speaker: Dato' Seri Dr. Awang Adek Hussin, Chairman SC Malaysia
Location: Securities Commission Malaysia
Delivered: 4 October 2023

Key Highlights:

At the 3rd SCxSC Grow Workshop, Dato’ Seri Dr. Awang Adek Hussin, Chairman of the Securities Commission Malaysia (SC), stressed the need to do more to address the specific needs and challenges by MSMEs. He elaborated on the importance of collaboration in the enterprenurial ecosystem. Today’s workshop was also the SCxSC Grow’s first collaboration with the Bioeconomy Corporation.

In his opening remarks, the SC Chairman announced that the SC and Ministry of Agriculture and Food Security (KPKM) have established the Malaysian Innovation Agri-Financing Steering Committee. The Steering Committee is an initiative that includes the SC, KPKM, Agrobank and MDEC.

Here are highlights from his speech:

  1. GROW’s focus in 2023 is on agriculture, touching on solutions to food security, sustainability, as well as showcasing ECF and P2P financing as fundraising options for MSMEs in the sector.
  2. Since 2015, less than 7% of RM4.4 billion that has been raised through ECF and P2P platforms has gone into agri-related businesses.
  3. The Malaysian Innovation Agri-Financing Steering Committee (MIAF) aims to enhance the agriculture sector’s understanding and adoption of alternative finance and technology, and facilitate growth of investment-ready agribusinesses.
  4. To increase private market space participation, the SC’s promotional arm Capital Markets Malaysia (CMM) conducted programmes to promote Corporate Venture Capital (CVC).
  5. The MyCIF programme plays a pivotal role in supporting the financing needs of SMEs. As of 2022, MyCIF invested in more than 3,600 MSMEs, totalling RM638 million.
  6. MyCIF's investments into agri-businesses increased from RM725,000 in 2021 to RM6.4 million in 2022.

Full Text

Bismillahirrahmanirrahim

Yang Berusaha Dr Lee Boon Chye, Chairman of the Malaysian Bioeconomy Development Corporation (Bioeconomy Corp)

Encik Mohd Khairul Fidzal Abdul Razak, CEO of Bioeconomy Corp

Dif-Dif Jemputan, Tuan-Tuan dan Puan-Puan Yang Dihormati Sekalian

Assalamualaikum warahmatullahi wabarakatuh dan salam sejahtera.

1. Pertamanya saya ingin mengucapkan selamat datang kepada semua yang hadir ke Suruhanjaya Sekuriti, sempena “SC-by-SC GROW and Bioeconomy Workshop” pada pagi ini.

2. Workshop ini adalah salah satu inisiatif untuk merangsang pertumbuhan bisnes dalam segmen SME. Pada masa yang sama, sektor-sektor seperti bio-based industries dan agri-tech juga menjadi fokus, seiring dengan pentingnya keselamatan makanan (food security) dan usaha-usaha kemampanan (sustainability).

3. I understand that the participants at the workshop today are from various backgrounds across the public and private sector. These include bio-based firms engaged in the development of bio-fertilisers, and microorganisms such as algae and bacteria and agri-tech firms involved in innovating farming for food security. Such diverse backgrounds and perspectives will inevitably help to enrich the discussions that will take place this morning.

Ladies and gentlemen,

4. GROW is a relatively new initiative under the SC-by-SC umbrella. This programme was established to accelerate progress in strategic and underserved sectors in the Malaysian economy using alternative financing channels.

5. GROW has four key objectives:
First – To grow, nurture, and revitalise targeted segments
Second – To raise awareness to a wider pool of MSMEs, ecosystem players and stakeholders
Third – To explore innovative and competitive opportunities; and
Fourth – To widen the investor pool to meet the unique requirements of each segment.
6. Through GROW, we want to make SC-by-SC nimbler and more targeted, as well as facilitate more action-based discussions that would improve policy effectiveness and better steer fintech development targets.

7. We believe this holistic approach will help us effectively address the specific needs and challenges faced by different segments within the MSME ecosystem.

SC-by-SC GROW Roadshow

Ladies and gentlemen,

8. This year, GROW focused on agriculture. The SC-by-SC GROW Fintech Conference in May brought together agricultural and fintech players to explore innovative solutions to food security, sustainability, and supply chain resilience. New cutting-edge solutions were showcased, highlighting the latest advancements across the fields of fintech and agri-tech.

9. In August, we held the SC-by-SC GROW Roadshow to showcase Equity Crowdfunding (“ECF”) and Peer-to-Peer (“P2P”) financing as fundraising options for MSMEs in the agriculture sector.

10. Participants included officers from agencies under the Ministry of Agriculture and Food Security of Malaysia, such as those from Lembaga Pertubuhan Peladang (“LPP”), Pertubuhan Peladang Negeri Johor and Lembaga Perindustrian Nanas, to name a few.

11. At the roadshow, agri-business leaders provided valuable insights on their experience raising funds through ECF and P2P platforms. They also shared actual success stories where these platforms were used to meet the fundraising needs of agroprenuers.

Launching Malaysian Innovation Agri-Financing Steering Committee (“MIAF”)

Ladies and gentlemen,

12. Even though these events helped raise awareness of alternative fundraising for agri-related businesses, we know that more needs to be done! 

13. Since inception in 2015, less than 7% of RM4.4 billion that has been raised through ECF and P2P platforms has gone into agri-related businesses. Hence, there are significant opportunities for agri-businesses to tap into these alternative financing methods to help support Malaysia’s food security.

14. It is important for all relevant stakeholders to work together to make sure that Malaysia’s agropreneurs have access to the funding options they need. These efforts can include collaborations between government agencies, financial institutions and industry associations.

15. To this end, I am pleased to announce that the SC and the Ministry of Agriculture and Food Security (“KPKM”) have established the “Malaysian Innovation Agri-Financing Steering Committee (“MIAF”)”.

16. The Steering Committee is a collaborative initiative that includes KPKM, Agrobank, Malaysia Digital Economy Corporation (“MDEC”) and the SC.

17. The committee aims to leverage the expertise and resources of its members to increase the agriculture sector’s understanding and adoption of alternative finance and technology, as well as facilitate the growth of investment-ready agribusinesses.

18. Insyallah, we will achieve these objectives because together, we can drive positive change and empower agropreneurs to thrive in their industry.

Facilitating the needs of MSMEs

Ladies and gentlemen,

19. Start-ups and MSMEs are the backbone of the Malaysian economy. Supporting their growth is vital for sustainable economic growth. In addition to financial support, market access and partnerships are also important for sustainable growth.

20. Partnering with investors with the right expertise and experience can be instrumental in a company's success. Because bio and agri-based companies are specialised in nature, this expertise is especially important for them.

21. In the private market space, the SC has worked to develop a facilitative regulatory framework that includes incentives to ensure that Venture Capital and Private Equity managers are able to support MSMEs across a wide range of sectors.

22. VC/PE firms not only provide financing, but they also support entrepreneurs in their business development journey. This ensures that agroprenuers have the financial backing and the business knowledge they need to grow their businesses.

23. Other private market fundraising avenues like ECF and P2P financing, allow investors to mobilise capital directly to agropreneurs and provides high-growth companies with more options to access capital.

24. These alternative financing options have gained popularity in recent years. In 2022, the private markets segments saw significant growth, with combined investments totalling RM3 billion from VC/PE, ECF, and P2P financing.

25. It is worth mentioning that ECF and P2P financing have continued to grow, with more than RM4.4 billion raised since inception in 2015, benefitting over 7,200 MSMEs, with 26 times more financing for the agriculture sector in 2022.

26. To increase participation in the private market space, the SC's promotional arm, Capital Markets Malaysia (“CMM”) has conducted a series of programmes to promote Corporate Venture Capital (“CVC”).

27. These programmes aim to give corporate executives from Malaysian PLCs best practices and practical options to engage more with startups in Malaysia.

28. CVCs can drive innovation. By facilitating collaboration between established corporations and startups, CVCs create opportunities for knowledge sharing, resource pooling and technology transfer, ultimately contributing to the overall development of the startup ecosystem in the country.

29. In addition to these initiatives, the Federal Government has set up the Malaysia Co-Investment Fund or MyCIF, to co-invest in MSMEs and Social Enterprises with private investors.

30. The MyCIF programme has been and will continue to play a pivotal role in supporting the financing needs of startups and SMEs. As at the end of December 2022, MYCIF has invested in more than 3,600 MSMEs, totalling RM 638 million.

31. The Government recently outlined its commitment to finance agri-based businesses. In this regard, MyCIF launched a special initiative to invest in agriculture-based enterprises where the government will match half of every Ringgit invested into agri-businesses. As a result of this initiative, MyCIF's investments into agri-businesses increased nearly ninefold from only RM725,000 in 2021 to RM6.4 million in 2022.

Ladies and gentlemen,
32. Networking and collaboration are crucial in the entrepreneurial ecosystem. They can lead to valuable partnerships and potential investment opportunities.

33. I want to assure you that the SC is committed to fostering an environment where entrepreneurs can thrive. We are here to support you and provide guidance when needed.

34. Thank you once again for your active participation and contributions. The future is yours to shape and I wish you great success!

35. With that, I wish you a productive day ahead. Thank you.

SECURITIES COMMISSION MALAYSIA







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