SC Malaysia registers first property crowdfunding platform

Securities Commission Malaysia building.

The Securities Commission (SC) Malaysia announced on Wednesday that it has registered EdgeProp Sdn Bhd as the first recognised market operator to establish and operate a property crowdfunding platform in Malaysia.

The decision was made following the revision of the SC Malaysia’s guidelines on recognised markets in May. EdgeProp was granted an in-principle approval this month.

The property crowdfunding initiative was announced by the Malaysian government in its 2019 national budget to provide alternative financing for first-time home buyers. The scheme will be regulated by SC.

According to the SC, property crowdfunding offers the same potential as that of equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms in providing an alternative source of financing. But, this avenue is specifically tailored for first-time homebuyers. Meanwhile, it also provides investors access to a new investment option.

Last November, EdgeProp, a subsidiary of The Edge Media Group, launched its property crowdfunding platform FundMyHome. At that time, it was open only to qualified individual investors and financial institutions.

On the alternative financing side, SC Malaysia had announced eight more new recognised market operators, including three ECF and five P2P financial platform operators. In total there are now 21 market-based financing platform operators registered in Malaysia.

As of June 2019, the ECF and P2P campaigns have provided about 432.1 million ringgit of financing to over 1,200 Malaysian businesses. The newly registered ECF platform operators are 1337 Ventures, Ethis Ventures, and MyStartr while the new P2P platform operators are CapitalBay, MoneySave, CapSphere, Crowd Sense, and MicroLeap.

DealStreetAsia reported Leet Capital will launch its ECF platform in November. Its founding partner Bikesh Lakhmichand said the firm also plans to establish a special fund for the ECF platform.

He said the fund, which has a minimum target of 5 million ringgit ($1.2 million), will be raised from a pool of angel investors or high net-worth individuals who are interested to back companies through Leet Capital.