EQUITY CROWFUNDING (ECF) AND PEER-TO-PEER FINANCING (P2P FINANCING)
ECF and P2P enables businesses to raise equity and debt financing respectively through online platforms regulated by SC as Recognised Market Operators (RMOs).
Companies conduct a fundraising campaign on its platform of choice, which showcases the company’s key characteristics, business plan, financial information, and other information as specified in the SC’s Guidelines on Recognized Markets.
Investors will have the opportunity to invest in the company, in exchange for either a share of ownership or interest payments, until the target amount of fundraising has been achieved within the campaign period.
Resources:
SC’s Guidelines on Recognized Markets can be accessed here.
Debt financing: Similar to traditional bank loans, companies raising funds using P2P Financing are obligated to pay monthly interests and repay the principal amount to investors.
Fundraising size: No limit on fundraising amount.
Eligibility: Locally incorporated companies and limited liability partnerships with specific business plans and fundraising purpose. The full eligibility requirements can be found in SC’s Guidelines on Recognized Markets.
Fundraising purpose: Working capital, business expansion, and others.
Statistics:
P2P Financing
P2P Financing: Where do I begin?
Choose a P2P financing platform and submit a loan application to the P2P financing platform of choice.
The P2P financing operator will conduct the necessary due diligence on the company.
Once the campaign is live on the platform, investors will evaluate the business and
amount needed to invest in the campaign. The campaign duration is set depending on the commercial needs and the ability to meet the campaign target.
Upon successfully reaching funding target, the funds will be disbursed to the business account.
The company must adhere to the repayment schedule as outlined in loan agreement.
(Repayment of loan + Interest)
Funding model on P2P financing
The company must meet at least 80% of the target amount of its campaign for the monies to be eligible to be disbursed to
the company.
Resources:
The list of registered P2P financing platforms can be accessed here.
Equity financing: Businesses offer investors a percentage of ownership in the company (i.e., equity) in exchange for financing.
Fundraising limit of a maximum of RM20 million on any ECF platform in its lifetime.
Eligibility: Unlisted Malaysian companies and limited liability partnerships with a clear business plan and fundraising purpose.
Fundraising purpose: Working capital, business expansion, and others.
Statistics:
ECF Financing
ECF: Where do I begin?
Choose an ECF platform and submit
application to the platform.
ECF platform operator will conduct the
necessary due diligence on the company. The company will need to prepare pitch materials and other disclosures. These are made available to investors on the platform.
Once the campaign is live, investors will
evaluate the business and amount needed to invest in the campaign. The campaign duration is set depending on the commercial needs and the ability to meet the campaign target.
*Investors can withdraw within the 6-day
cooling-off period
If the target funding is achieved within the
campaign period, the company can utilise the funds as planned and must update investors on spending and business progress postfundrasing. The fundraising campaign is hosted on the ECF platform for a period of time.
Funding model on ECF
ECF funding follows an ‘all or nothing’ model - raise the full target
by the deadline or refund investors.
Resources:
The list of registered ECF platforms can be accessed here.
An initiative to catalyse and nurture Fintech development in the Malaysian capital market.
The SC’s outreach initiative that facilitates fintech
developments and explores innovations in the capital market space with the public.
The New Industrial Master Plan 2030 (NIMP 2030) Strategic Co-Investment Fund (NIMP CoSIF) is a government co-investment scheme to achieve Malaysia’s industrial objectives. The NIMP CoSIF will co-invest in any campaign by small and medium enterprises or MTCs on ECF
or P2P Financing platforms within the 21 NIMP 2030 sectors.
The Malaysia Co-Investment Fund (MyCIF) is a strategic government initiative that co-invests with private investors on regulated ECF and P2P
platforms into MSMEs. MyCIF is funded by the Ministry of Finance (MoF) and administered by the SC.
