MyCIF fuels nearly US$424mil in private investments for Malaysian MSMEs in 2023

• Invested US$61.25 mil in 2023, boosting 3,587 Malaysian SMEs
• New US$212 mil allocation in 2024 supports agriculture, healthcare, education sectors

In a display of support for micro, small, and medium enterprises (MSMEs) across Malaysia, the Malaysia Co-Investment Fund (MyCIF) has co-invested US$61.25 million (RM289 million) through alternative financing platforms in 2023. This investment has significantly spurred the growth and competitiveness of 3,587 MSMEs, according to the latest MyCIF Annual Report released in May by the Securities Commission Malaysia (SC).

MyCIF, established by the Ministry of Finance under Budget 2019, has been a pivotal force in the financing landscape, utilizing equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms to channel much-needed funds into MSMEs. Commenting on the report, SC Chairman Dr Awang Adek Hussin (pic) highlighted MyCIF's catalytic role, noting that the RM289 million invested last year has attracted nearly US$424 million (RM2 billion) in private investments.

“The agriculture sector, in particular, has seen a notable 86% increase in issuers supported by MyCIF’s agriculture scheme. Moreover, we have broadened our reach, supporting a higher proportion of MSMEs outside the Klang Valley, increasing from 40% to 49% year-on-year,” Awang Adek stated. This expansion underscores MyCIF's commitment to fostering inclusivity and ensuring that MSMEs across all regions benefit from these financial initiatives.

Since its inception, MyCIF has received a total allocation of RM250 million from the government, successfully co-investing RM930 million in over 6,000 MSMEs. This has generated a 3.7 times multiplier effect, drawing in RM3.82 billion in private investments and bringing the total funds raised with MyCIF’s support to a staggering RM4.75 billion. Additionally, MyCIF has achieved a net positive return on capital of RM20.7 million, which is 8.2% of the total government allocation.

[RM1 = US$0.212]

Looking ahead, MyCIF has been allocated an additional RM100 million in Budget 2024. This new funding will support initiatives in key areas such as agriculture, healthcare, education, environment, community, and Waqf asset development through State Islamic Religious Councils, aligning with the national food security and sustainability agenda.

The recent MyCIF Open Day, attended by Finance Minister II Amir Hamzah Azizan, celebrated MyCIF’s five-year impact on MSMEs. The event also saw the announcement of two new incentives aimed at boosting MSMEs in the upstream segments of the agriculture and bio-economy sectors, effective until the end of 2025. 

These include investments at a 0% financing rate for eligible P2P campaigns and the waiving of dividend income from investments in eligible ECF campaigns. Prime Minister Anwar Ibrahim further extended these incentives to MSMEs involved in Waqf asset development projects, recognizing Waqf’s critical role in enhancing national food security.

The success of MyCIF serves as a cornerstone in the SC’s 5-Year MSME Roadmap, which aims to enhance MSME and mid-tier company (MTC) access to the capital market. The key outcome sought is to increase MSME and MTC capital market fundraising by more than 5-fold from RM6.3 billion in 2023 to RM40.0 billion by 2028. With its proven multiplier effect, SC Malaysia said it is confident that MyCIF's innovative co-investment model will undoubtedly play a crucial role in realizing this ambitious national target.