MaGIC SE in talks with agencies, VCs & corporations for impact investments

The launch of the Malaysian Social Enterprise Blueprint, by prime minister Mohd Najib Abdul Razak with MaGIC SE.

In its bid to achieve the targets set out in the Malaysian Social Enterprise Blueprint, the Malaysian Global Innovation & Creativity Centre Social Entrepreneurship unit (MaGIC SE) is engaging other government agencies, local venture capitalists (VCs) and corporations for impact investments.

MaGIC SE executive director Ehon Chan said the team was speaking to a number of parties to work out investments for social enterprises. “We are currently in conversation with various agencies, especially government agencies and venture capital to look into impact investment,” he told DEALSTREETASIA.

Chan said MaGIC SE wanted to make sure that it does not become the only place for social entrepreneurs to go to. “We want to become a one-stop shop but not the only source for them.”

As impact investment becomes more than mere buzz word to corporate sector and the investors, MaGIC SE is hoping to encourage more investors, to not only look into high returns but also social returns, on their investments.

“Right now, Malaysia’s impact investment is near zero and we are trying to create (a culture of it). Khazanah Nasional is active in this, having launched their recent social-impact sukuk,” Chan said, noting that Khazanah Nasional’s MYR1 billion ($282 million) Sukuk Ihsan programme was the first social-impact bond to be rated globally.

Proceeds from the bond programme will go towards educational projects.

On the VCs that MaGIC SEis in talks with, he said: “These are mostly Malaysian VCs but they also have branches overseas. We don’t have the data of how many are Malaysia-based and how many are foreign.”

Chan noted that many corporations are also looking at investing into social enterprises and they have been going to MaGIC for advice. “I can’t name which ones, as it is too early but one of the big credit card companies is among them. These corporations traditionally have a foundation that gives grants for education but they want to ensure that their funds are responsibly used and have a longer return than just one-off impact,” Chan explained.

“The appetite is there but we need to be more prescriptive because for a lot of the corporates and the older generation, this is a new concept,” he added.

The Malaysian Social Entrepreneurship Blueprint was launched yesterday by the prime minister of Malaysia, Mohd Najib Abdul Razak. The blueprint outlines a three-year strategy, in which MaGIC SE (supported by the MYR20 million committed by the government in 2013 for social entrepreneurship initiatives), will work to develop a self-sustaining social entrepreneurial ecosystem.

“(The blueprint) is a result of national consultation led by MaGIC SE with over 200 individuals from 150-plus leading social enterprises, organisations, government agencies, educational institutions and corporations,” the prime minister said in his speech.

The three thrusts of the blueprint are to build a critical mass of successful social enterprises so that they become inspirational models for businesses and charities across the nation; to create an enabling ecosystem to support the fostering of social and public-private partnerships; and to put in place systemic changes so that regulatory, tax and administrative frameworks ensure sustainable and consistent growth for the sector in the long term.

“The successful implementation of the blueprint will see a social sector that is more entrepreneurial and self-sustaining; a public sector that is collaborative and will deliver more innovative, cost-effective and better services; and a private sector that will invest in a more equitable and sustainable economy,” he said.

Among the goals under the blueprint, is to double the number of successful social enterprises in Malaysia from the current 100 (by end-2015), and to hit 1,000 in three years, Najib added.

MaGIC chairman Mohd Irwan Serigar Abdullah said in his opening address that social entrepreneurship is now a key national agenda in many countries.

“Within ASEAN itself, countries like Vietnam, Cambodia, Thailand and Singapore have set up agencies to focus on building this sector,” he noted, “Since MaGIC opened, it has trained hundreds of aspiring social entrepreneurs, funded five social enterprises to launch and grow, and conducted outreach to over 30 rural and regional areas across Malaysia, including Sabah and Sarawak.”

The MaGIC Accelerator Programme includes a social enterprise track, opened to Malaysian social entrepreneurs.

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