By

Mr. Rizal Nainy

Deputy CEO (I)

Global Symposium: Innovative Financial Inclusion

Confidential SMEs : The Backbone of the Economy

2 Source: Department of Statistics Malaysia and SME Corp. Malaysia

97.3% (645,136) business establishments

in the country are SMEs

SMEs cut across all sectors of the economy

High Income Nation

by

2020

41%

65%

23%

GDP

EMPLOYMENT

EXPORTS

Achievement

in

2015

36.3%

65.5%

17.6%

Confidential

Development Financial

Institution (DFIs)

Banking Institutions

(BIs)

BNM Special Funds

CGC Special

Guarantee Schemes

MDV IP Financing

Government Crisis

Funds

Venture Capitals

Leasing & Factoring Institutes

Ar-Rahnu & Pawn Broking Insts.

Microfinance Institution

Mainstream Financing Mainstream

Financing

Financial Landscape for SMEs in Malaysia

Government Funds

3

Financial Institutions (FIs) Other Avenues

Alternative Financing

Angels

FinTech:

- ECF

- P2P

- IAP

(online financing)

Confidential

HIP 3

SME Investment

Partner

Early stage

Revenue

Business

Development

Stage Seed Expansion Pre-IPO Maturity Valley of

Death

Start-up

Lower

risk Higher

risk

Founder

Government grants

Business angels

Private equity

Debt/bridging loan

Bond market/ SME bond

MyULM Main /ACE Markets

Venture capital

- Cradle

- MDEC

- MOSTI

- MTDC

- Biotech

Corp

- MAVCAP

- MTDC

- MOSTI

- Biotech Corp

- MAVCAP

- MDV

- MTDC

- KMP

- Biotech Corp

- SME Bank

- MIDF

- BPM

- BNM

- MATRADE

Source: Securities Commission of Malaysia (prepared for SME Masterplan 2012-202)

Gaps still exist in financing for start-ups & early stage

4

SME Corp.

Malaysia

SME Corp.

Malaysia

Confidential

New Market-based Funding

In Malaysia, there is emergence of some new market-based funding to meet SMEs’ changing needs

6

THANK YOU

7

Appendix

Confidential

Conclusion

Lesson learned in forming collaborative efforts to scale up

innovative financial inclusion initiatives

Concern regarding the source of alternative financing to assist

start-up and innovative SMEs in supporting their business growth.

These companies are facing difficulties in getting financial assistance

from local banks since their business and technology proposals do not

have sound financial support and good guarantee.

Government has offered incentives for the contribution of private

sector and there is also a need to create awareness to get involvement

from the private sectors, for instance in ECF platform.

The need to create public awareness through the outreach

programmes in partnership with other Government Agencies and

industry players to build awareness on new methods of capital

formation in the digital age of online interactive media.

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