Malaysia

With the Securities Commission spearheading the move to regulate equity crowdfunding (ECF) platforms, Malaysia has the opportunity to become the micro investment financial centre in Asia by allowing small and medium enterprises (SMEs) and startups better access to funds for growth.

Crowdfunding platform operator pitchIN, who is interested in becoming an ECF platform operator in Malaysia, said investors, especially angel investors, would also benefit from such regulations as there would be easy access to important information.

According to the SME Annual Report 2012, small and medium enterprises represent 98.5% of the approximately 78,000 companies in Malaysia, with the remaining 1.5% made up of multinational and public-listed companies.

In many developed nations, SMEs are thought to contribute between 40% and 60% to gross domestic product and 60% and 70% of the employment, but the SME sector in Malaysia has not reached the mark yet.

Deputy Prime Minister Tan Sri Muhyiddin Yassin recently said, “SMEs in Malaysia contribute 31% to the GDP and 59% to employment. The SME sector has a lot of catching up to do as we work towards achieving developed nation status by 2020”.

At first glance, Malaysia does not have a lot going for women starter-ups.  It is a Muslim state with conservative gender codes that persist in the fabric of domestic life.  State Sharia law continues to disenfranchise women legally (limiting divorce rights, for instance).  Despite these cultural realities, three cultural and socio-economic forces have combined to allow for radical experimentation in female entrepreneurship: A grow-or-die commitment to growth through innovation; a national imperative to optimize the productivity of its native workforce; and a strong public sector positioned to execute daring interventions.

The SME community in Malaysia has raised numerous concerns about the application of the Competition Act 2010 to their businesses. The concerns range from a claim that the Act should not apply to SMEs at all, to complaints that the Act is too complex for small businesses to understand.