SMEs play a vital role in our economy, comprising over 97% of businesses and contributing a substantial 38.2% to the Malaysian GDP. Despite their significance, Malaysian SMEs encounter notable obstacles, with limited access to funding from financial institutions being a prevailing challenge for their growth and expansion.
According to a report published by Funding Societies, around 70% of SMEs in Southeast Asia begin their business journey by raising seed money from their personal savings and receiving financial support from family and friends. This highlights the important role of personal networks and individual efforts in kickstarting entrepreneurial endeavors.
Traditional banks play a significant role as well, accounting for approximately 23% of SME funding in Malaysia. However, the report also indicates that a growing number of SMEs, around 7%, are turning to alternative sources such as fintech companies for their funding needs. This shift demonstrates the evolving landscape of financial solutions and the willingness of SMEs to explore new avenues for securing capital.
SME X Platform: facilitate fundraising for small businesses
In a joint effort between Bursa Malaysia Bhd and the Companies Commission of Malaysia (SSM), the SME X Platform was unveiled on 23 Jan 2024. This innovative platform aims to enhance corporate fundraising and open up new avenues for business investment opportunities specifically tailored for small and medium enterprises (SMEs).
The collaboration between Bursa Malaysia and SSM
Through the integration of Bursa Malaysia market data and data from the Companies Commission of Malaysia (SSM), the online platform offers a comprehensive suite of information that empowers financial institutions and investment entities to make informed decisions. This includes a wide range of sectoral performance data, evaluation of key financials, indicators of potential listing opportunities, and company comparisons within the same sector.
Moreover, the platform provides detailed insights into directors and management, shareholding structures, and key financials of each company, as well as its subsidiaries and affiliated companies with common shareholders.
SSM CEO Datuk Nor Azimah Abdul Aziz has mentioned the seamless integration of data within the platform is made possible by the contribution of Corporate Business Information Data (CBID) by SSM, encompassing data from over 650,000 companies. This includes key statutory information and financial data from approximately 200,000 companies that have demonstrated high revenue over the past three years.
This significant collaboration between Bursa Malaysia and SSM aims to foster a robust data ecosystem, enhancing the platform’s capabilities and ensuring the provision of current and valuable insights for well-informed decision-making.
As of December 31, 2023, SSM has registered over 9.1 million businesses and over 35,000 limited liability partnerships. Additionally, the commission has incorporated over 1.5 million companies, with 1.643 million active businesses, 34,038 active limited liability partnerships, and 666,767 active companies.
Better avenues for quality companies to raise fund
At the launch of the SME X Platform, Datuk Muhamad Umar Swift, the CEO of Bursa Malaysia, highlighted the exchange’s commitment to innovation and leveraging data and technology to drive market growth and meet stakeholders’ needs. The introduction of the SME X Platform aligns with Bursa Malaysia’s goal of assisting companies in raising funds for their expansion and growth.
By bridging the gap between deserving companies seeking capital and parties looking to invest, the platform enables various funding options such as equity through Initial Public Offerings (IPOs), debt fundraising via Bursa Malaysia RAM Capital Sdn Bhd, and investments from private entities, venture capitalists, and other financial institutions. This emphasis on facilitating fundraising opportunities reflects Bursa Malaysia’s dedication to supporting the growth of businesses and fostering a dynamic financial ecosystem.
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