Cofundr applauds government’s decision in allocating more funds into alternative financing to support local MSMEs

KUCHING: Crowd Sense Sdn Bhd (CSSB), a peer-to-peer (P2P) operator licensed by the Securities Commission Malaysia operating under the Cofundr platform has lauded the government’s decision to allocate more funds into alternative financing which will further support the needs of micro, small and medium enterprises (MSMEs).

Often underserved by traditional financial institutions, the pragmatic push will also open up opportunities for MSMEs and businesses who have been unfavourably impacted by the Covid-19 pandemic.

The allocation of RM80 million through the Malaysia Co-Investment Fund (MyCIF) to support the alternative financing market including equity crowdfunding (ECF) and P2P financing under Budget 2022 will undoubtedly stimulate the economic development of the country, and accelerate Malaysia’s MSME sector which is a major contributor to the socio-economic development of the nation.

The RM80 million allocated is an increase from the initial RM50 million from 2019.

“At CSSB, the focus is to promote financial inclusivity for MSMEs by enhancing access to fundraising and provide consistent innovative solutions,” CSSB chief executive officer Paul Kuan said.

“We hope to play an important role on the government’s call in supporting the MSMEs as it is our mission to continue elevating crowdsourced financing and investment to a level beyond simply that of an alternative model.

“Cofundr is committed to make accessibility to financing more robust, which is in line with the company’s tagline - providing ‘Financing That Makes Investment Sense’.

“As a new player that is slowly but surely making its mark in the ECF/P2P industry, the government’s initiative will also assist Cofundr’s overall strategy by co-funding the financing request from issuers as the crowdfunding business continue to thrive in 2022.”

Another associated incentive that CSSB lauded is the introduction of 100 per cent stamp duty exemption for P2P financing over the next five years.

The current stamp duty rate can be up to 0.50 per cent of the financing amount which would cost an issuer RM5,000 for every RM1 million raised.

MSMEs raising funds are expected to save approximately RM5 million annually based on last year’s financing volume of around RM1.14 billion.

“The additional MyCIF allocation and stamp duty exemption will help make P2P financing an affordable channel for MSMEs to raise funds during this economic recovery period.

“A lot of MSMEs from various industries across the country have benefited from Cofundr’s financing programme.

“In line with managing the risk of investing, Cofundr is dedicated to supporting businesses especially those with high attention to proper environmental, social and government (ESG) practices.

“We hope that our local MSME’s would step forward to approach us and ask questions if they are in need of assistance.”