| 1. | Good morning and welcome to the Securities Commission Malaysia’s NaviGate: Capital Market Green Financing Series. |
| 2. | This is the first session of the series for 2021 and our objectives are firstly, to raise awareness on the availability of alternative market-based financing among micro, small and medium-sized enterprises (MSMEs), and secondly, to connect green and sustainability-focused companies with these alternative platforms. |
| 3. | As you may be aware, the demand for environmentally friendly and sustainable practices has coincided with the rise of climate change to the top of the global agenda. And scientists have warned, that the world has reached a tipping point in addressing climate-related issues with damaging consequences for future generations should our actions fall short. There is a pressing need to green the ecosystem for a more sustainable future. |
| 4. | Engagements domestically with the Malaysian Green Technology and Climate Change Centre (MGTC) and Sustainable Energy Development Authority (SEDA), have highlighted, a large demand for financing from companies involved in the green energy and technology sectors. |
| 5. | Hence, it is crucial that the SC and related Government agencies undertake, cross-agency collaboration and joint events to assist these sectors and accelerate the nation’s sustainability agenda. |
| Supporting Malaysia’s Sustainable Development Agenda | |
| 6. | Malaysia as we are aware, is a signatory to the Paris Agreement on Climate Change and a party to the UN’s Sustainable Development Goals (SDGs). Under the Paris Agreement, Malaysia has committed to reduce Greenhouse Gas emissions by 45% of GDP1 by 2030, and to maintain, at least 50% of forest and tree conservation cover. |
| 7. | I gather that the upcoming twelfth (12th) Malaysia Plan, is expected to reinforce this commitment with environmental sustainability identified as a key strategic thrust. As the country transitions to a carbon neutral, and circular economy, it will require investments to be directed at promising growth areas, such as clean and sustainable energy, energy efficient solutions, and the green sector - areas familiar to our participants today. |
| 8. | The Government has estimated that RM 45 billion Ringgit is required to finance Malaysia’s long-term development goals . But public funding alone, would be neither sufficient nor sustainable to achieve the nation’s sustainability goals2. The private sector must also play their part in the transition to green and sustainable activities. |
| 9. | To support this transition, the SC believes, the Malaysian capital market can offer, workable financing solutions to match funding needs. In fact, given MSMEs’ lower capital requirements, Equity Crowdfunding (ECF) and Peer-to-Peer (P2P) financing platforms would be viable alternatives to traditional financing. |
Ladies and gentlemen, Access to Financing through the Capital Market |
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| 10. | In 2015, the SC launched the digital ECF platform to provide early-stage financing for start-ups and entrepreneurs, and this was followed by P2P financing in 2016, to facilitate MSMEs raise working capital or capital for growth. |
| 11. | Since launch, total funds raised through these digital platforms have reached RM 1.3 billion Ringgit as at end-December 2020, and benefiting around 3,000 MSMEs. A number of companies have also accessed ECF and P2P financing to fund their green projects and businesses such as in solar power, waste management, and energy efficiency solutions. |
| 12. | The Government also recognises the significant role MSMEs play in contributing towards the country’s growth, employment and innovation. The establishment of the Malaysia Co-Investment Fund or MyCIF, which was initially allocated a sum of 100 million Ringgit, signals the Government’s commitment to co-invest alongside the individuals and private investors in promising MSMEs through the ECF and P2P platforms. Budget 2021 saw a further RM 50 million Ringgit and 30 million Ringgit allocated for P2P and ECF investments respectively under this scheme. |
| 13. | And besides financing, these platforms offer issuers an opportunity to build brand awareness with prospective consumers. With investors under the age of 35 accounting for close to 60% of individual investors in ECF and P2P platforms, this is a good avenue to promote your business to a growing demographic. |
| 14. | I would like to urge all participants to take this opportunity to gather as much information as possible from the speakers lined up today. They will share their insights on the fund raising experience, challenges involved, and key success factors for raising funds. For the ECF segment, we have speakers from pitchIN and Ray Go Solar EPC Sdn Bhd, while Funding Societies and iHandal Holdings will cover P2P financing. |
| 15. | By the end of the session, I hope that you will be more informed on how to access such financing facilities, and able to identify the most appropriate funding structure for your business growth. |
| Closing | |
| 16. | In closing, I would like to take this opportunity to express my gratitude for the support of the TKSUs from the various Ministries in this session today, MGTC and SEDA, as well as our esteemed speakers. |
| 17. | Moving forward, the SC will continue collaborating with the relevant parties to enhance awareness on green and sustainable financing. This includes programmes undertaken by Capital Markets Malaysia to raise private sector awareness on sustainability. Such efforts are closely aligned with our Sustainable and Responsible Investment Roadmap for the Capital Market or SRI Roadmap. The underlying aim is to create a facilitative SRI market ecosystem to drive Malaysia’s sustainable development. |
| 18. | Let us all seize this opportunity to work together in building a better and greener world, as well as preserve economic prosperity for future generations. |
| 19. | On that note, I hereby launch the NaviGate: Capital Market Green Financing Series and the first event of the series on ECF and P2P financing. To our MSME participants, I wish you every success in the years ahead. |
| 20. | Thank you. |
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