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P2P generates over RM1 billion to finance SMEs

KUALA LUMPUR: Peer-to-Peer (P2P) Financing has generated over RM 1 billion of financing to SMEs since the start of the pandemic.

Securities Commission Malaysia (SC)chairman Datuk Syed Zaid Albar said fintech could be a key enabler in re-building the Malaysian economy as the country recovers from the pandemic.

During the 2022 Budget, it was tabled that the allocation of RM 80 million to the Malaysia Co-investment Fund (MyCIF) was an increase from RM 50 million when it was first introduced in 2019 with the addition of RM 100 million from Bank Pembangunan Malaysia Berhad (BPMB).

MyCIF is a co-investment alongside private investors via P2P and Equity Crowdfunding (ECF) platforms that has helped create additional funding sources for MSMEs and spur investor confidence for P2P and ECF investments.

In addition, the government has introduced a 100 per cent stamp duty exemption for successful financing agreements on any registered P2P platform with SC for the next 5 years effective from 1 January 2022 to 31 December 2026.

This will reduce financing costs and encourage MSME adoption in P2P financing.

Currently, the stamp duty rate is between 0.05% to 0.50%. 

CapBay’s Co-founder and CEO, Ang Xing Xian, lauded the announcement of the 2022 Budget 2022 that focuses on supporting MSMEs and the contribution of ECF and P2P fintechs to the Malaysian economy. 

“The P2P financing industry has proven to be pivotal in economic recoveries in other developed countries. 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. We expect adoption in this space to grow exponentially due to additional support and initiatives from the government,” said Ang.

CapBay is one of the largest P2P players, having funded over RM 400m on its P2P Financing platform since the start of the pandemic while their investors have generated net returns (after fees) of up to 10% p.a. with 0% financing loss. 

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