Micro, Small and Medium-Sized Enterprises and Mid-Tier Companies
On 23 May 2024, the SC launched the Catalysing MSME and MTC Access to the Capital Market: 5-Year Roadmap (2024-2028) (Roadmap), a multi-year blueprint that seeks to better position the capital market as an attractive and robust source of financing for MSMEs and MTCs while building a solid foundation for scalable and sustainable MSME and MTC capital market solutions.
The Roadmap was launched by the Secretary-General of Treasury Datuk Johan Mahmood Merican on behalf of the Minister of Finance II, Datuk Seri Amir Hamzah Azizan. The event, held at the SC, was attended by over 400 participants comprising representatives from government ministries and agencies, MSME and MTC business owners, industry associations, research houses, and financial intermediaries.
In developing the Roadmap, a whole-of-nation approach was employed, comprising extensive engagements with key stakeholders – both from the public and private sectors. The SC conducted four ideation and solutioning workshops attended by MSME and MTC owners, industry associations, capital market intermediaries, and government agencies, gaining greater insights into the salient financing challenges faced by MSMEs and MTCs. This was complemented by 25 bilateral engagements with several workshop participants to dive deeper into their issues and suggestions.
To garner crucial government support, the SC undertook a socialisation exercise and engaged the Prime Minister’s Office and relevant ministries including the ministers of Entrepreneur Development and Cooperatives (MECD), Economy (MOE), and Investment, Trade, and Industry (MITI), to ensure that the Roadmap was aligned to the priorities and goals of each ministry. After the launch of the Roadmap, the SC continued to work closely with the government, including presenting the Roadmap at the National Entrepreneur and SME Development Council (NESDC), which is chaired by the Deputy Prime Minister, to secure further support of the ministries and agencies.
The successful implementation of the 36 initiatives identified in the Roadmap will require multi-stakeholder commitment and effort. Hence, the SC has engaged key partners to support the initiatives to position the capital market as an attractive financing option for MSMEs and MTCs. As at December 2024, the SC has entered into two Memoranda of Understanding (MOUs). The first was a partnership with Khazanah Nasional to catalyse the growth and expansion of MTCs via an initial RM500 million investment commitment by Khazanah, as well as through various capacity-building programmes and a fundraising incubation initiative to enhance the capital market-readiness of MTCs. The other was with the Credit Guarantee Corporation (CGC) to connect MSMEs and MTCs to capital market financing solutions that best meet their financing needs via CGC’s imSME platform, as well as to support the de-risking of investments in MSMEs and MTCs by extending credit guarantees to capital market solutions.
Looking ahead, the SC will continue to engage extensively with parties interested in moving the Roadmap initiatives forward.
Mitigating Systemic Risks And Promoting Financial Stability
Enhanced Risk Governance Framework
In 2021, the SC-wide risk governance framework was enhanced as part of an overall initiative to have an effective integrated and predictive risk surveillance to maintain regulatory agility.
The structured risk governance framework integrated the wider spectrum of risks such as technology, cyber and conduct risk at the SC’s Systemic Risk Oversight Committee (SROC) and Accounting, Market and Corporate Surveillance Committee (ACMS).
Intensified surveillance
The SC continued to intensify its surveillance of systemic risk to maintain market resilience and stability. Regular SROC engagements were held to deliberate concerns emanating from various segments across the capital market. Domestic equity and bond market, foreign fund flows and trade participation continued to be monitored closely for potential stress points.
In addition, measures and economic stimulus packages introduced by the government to weather the impact of COVID-19, market trading conduct and the financial position of listed companies were among the focus areas for discussion.
Thematic assessments
The SC also conducted thematic assessments covering investors’ fund flows, the position of firms, and policy decisions to ascertain the possible impact on the capital market. In 2021, the SC reviewed and enhanced its crisis indicators on potential emerging risks in the
capital market.
The enhanced crisis indicators provided a reference point for escalation to SROC when the identified indicators and triggers materialised and ensured prompt response to manage and prevent any issues of concern that might lead to a systemic crisis.
Joint regulatory discussions
In 2021, the SC conducted frequent joint regulatory discussions with other authorities such as Bank Negara Malaysia (BNM) and Labuan Financial Services Authority (Labuan FSA) to identify systemic risk concern areas within the financial and capital markets in Malaysia.
Monitoring of various components of the capital market
The SC continued its efforts to undertake a methodological and integrated approach to ensure any potential systemic risk was being monitored, mitigated, or managed. Figure 1 highlights the findings from the following risk assessments on the various components of the capital market.
