• Funding challenges create growth barriers

Funding remains an issue for the fintech firms surveyed. With most of the firms in the earlier stages of development, more growth-stage equity and capital are needed.

However, over two-thirds (68 per cent) of the respondents have a runway of less than a year to plan and raise funds for growth. In fact, 45 per centof the respondents rely on selffunding. While most (76 per cent) of the respondents agreed that there are enough funding channels available, 52 per centstill found it difficult to obtain funding on their own.

Shankar Kanabiran, Partner and Malaysia Financial Services Banking and Capital Markets Advisory Leader at Ernst & Young Advisory Services Sdn Bhd explained, “As with most start-ups, fintech firms may find themselves limited by funding options.

“Venture capitalists and banks are often the first port of call for fund-seekers, although most will not take on the credit risk of companies with a track record of less than three years.

“That said, there are many incubator and accelerator programs, and even government channels that fintech firms can leverage for seed funding. They should also look to access the wider network of business opportunities and investors who can help them to scale and be a source of funding too.”

In Malaysia, 19 per centof fintech firms believe there is high support from the government in terms of funding support, while 50 per centsay there is medium or moderate support, and 27 per centindicate low support. According to the respondents, the government should make funding more accessible (43 per cent), come up with more assistance schemes (29 per cent) and have a wider range of criteria (29 per cent).

“Venture capitalists and banks are often the first port of call for fund-seekers, although most will not take on the credit risk of companies with a track record of less than three years.” Shankar Kanabiran, Ernst & Young Advisory Services Partner