Budget 2020: RM50mil set aside to co-invest in ECF and P2P fundraising

Lockman says the RM50mil commitment in ECF and P2P platforms shows the government's confidence in the industry. — SIA HONG KIAU/The Star

The RM50mil allotment in Budget 2020 to match investments in equity crowdfunding (ECF) and peer-to-peer (P2P) platforms, for the second year running, shows the government's confidence in the sector, says the Registered Digital Markets Association.

President Elain Lockman commended the commitment towards the Malaysia Co-Investment Fund scheme (CIF), also allocated RM50mil in the 2019 budget.

This fund had matched public investments in Small Medium Entreprises (SMEs) through ECF and P2P platforms by up to RM500,000 per fundraising project.

“The additional commitment will catalyse the interest from the crowd to invest in this asset class and incentivise SMEs and startups to consider ECF as a viable and preferred fundraising channel,” said Lockman, who is also Ata Plus Sdn Bhd director and co-founder.

Pitch Platforms Sdn Bhd (pitchIN) co-founder and chief strategy officer Kashminder Singh said the allocation would give companies extra validation and foot up in financing, which will help bridge the funding gap for companies that struggle to get investments from banks.

“This is not just a grant, but a direct investment by the government which signalling its confidence in these companies,” he said.