The Malaysian government has earmarked efforts to promote private financing for research and development, commercialisation and innovation (R&D&C&I), under a strategy to translate innovations into wealth in the country.
The efforts include increasing access to private sources of financing, developing a framework for risk mitigation and management of crowdfunding activities, the 11th Malaysia Plan revealed.
“Access to financing and assistance will be strengthened through continuous engagement with private financial institutions, venture capitalists, and angel investors to widen financial options, reduce dependency on government resources and increase the financing of R&D&C&I projects.”
This includes the expansion of the Technology Park Malaysia Angel Chapter and early stage financing for SMEs through the SIP programme.
“In addition, equity crowdfunding will be explored to widen the range of fundraising and investment products, as well as improve market access to a broader spectrum of issuers and investors,” the plan, released on Thursday, noted.
The plan added that crowdfunding will be promoted to provide financing opportunities for SMEs, start-ups, and innovative businesses seeking liquidity in a more efficient and transparent manner.
The Malaysian Securities Commission has been pushing for the legislation of equity crowdfunding since 2014. As of the latest updates, the parliament has yet to table the bill.
“The Eleventh Plan will focus on strengthening relational capital by improving collaboration among all stakeholders. Innovation will be targeted at both the enterprise and societal levels, instead of previous efforts which focused primarily on national-level initiatives,” the plan stated. At the enterprise level, initiatives will enhance demand-driven research, improve collaboration between researchers and industries, and encourage private investment in R&D&C&I.
The government will also look into a social finance model for public-private partnership programmes to be introduced to promote investments from the private sector, foundations, and individuals in delivering social services.
Through this model, the ‘payment by results’ mode will be introduced, where private social impact investors will provide funding for NGOs and CBOs to implement social services and will be reimbursed by the government when the agreed outcomes are achieved.
This model will reduce the burden and risk of social services programmes through the sharing of resources and leveraging civil society’s collective skills, enthusiasm, and innovation capacity with the government as a facilitator.