Malaysia is launching a co-investment fund to support rising businesses, using P2P and equity crowdfunding (ECF) platforms – providing both conventional and Shariah offerings – to attract private investors to join this initiative.
This Strategic Co-Investment Fund (CoSIF) will be administered by the Securities Commission Malaysia (SC) with an initial allocation of RM131.5 million (US$29.82 million) to prioritize growth in 21 economic sectors given focus in the nation’s New Industrial Master Plan (NIMP) 2030.
Being aligned with the SC’s effort to democratize capital market financing access for local SMEs and mid-tier companies (MTCs), CoSIF will also spotlight four emerging growth sectors of:
- carbon capture, utilization and storage,
- electric vehicles,
- renewable energy and
- advanced materials.
“Since the SC introduced the ECF and P2P frameworks in 2015 and 2016 respectively, these platforms have helped over 15,000 companies secure funding, particularly those outside the risk appetite of traditional banks,” said SC Chairman Mohammad Faiz Azmi.
“For MSMEs and MTCs, ECF and P2P are attractive because they allow faster access to capital, a wider investor base and more accessible funding terms.”
Mohammad Faiz said fundraising through ECF and P2P grew at a compound annual growth rate of 62% from 2018 to 2023, with RM2.2 billion (US$498.71 million) raised in 2023 alone. “Our data shows that 2024 has surpassed this.”
A parallel scheme is the Malaysia Co-investment Fund. Since its inception in 2020, with a seed funding of RM260 million (US$58.89 million), MyCIF has co-invested over RM1 billion (US$226.47 million) in over 9,000 MSMEs.
CoSIF aims to replicate this success by adopting a similar co-investment approach of government participation while allowing the wisdom of the market to guide investment decisions.
“Acting as a co-investor, the government can help mitigate these risks, enhancing investor confidence and unlocking greater capital flow to these businesses,” said Mohammad Faiz.
The list of ECF and P2P operators for the NIMP CoSIF will be announced before the end of March 2025.
