Budget 2022 boosts Peer-to-peer financing (P2P) industry

• RM80 million is allocated for the Malaysia Co-investment Fund (MyCIF) and an additional RM100 million is allocated for investments by Bank Pembangunan Malaysia Berhad (BPMB) to support alternative financing

• Introduction of 100% stamp duty exemption on any successful financing agreement executed on P2P financing platform for the next 5 years

KUALA LUMPUR, 2 November 2021 – Peer-to-Peer (P2P) Financing under the supervision of the Securities Commission Malaysia (SC) has generated over RM 1 billion of financing to SMEs since the start of the pandemic. According to SC chairman Datuk Syed Zaid Albar, fintech could be a key enabler in re-building Malaysia’s economy as the country recovers from the pandemic.

The Budget 2022 that was announced by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz was the largest budget to date to spur post-COVID recovery with a focus on supporting the growth of Micro, Small and Medium Enterprises (MSMEs). The allocation of RM 80 million to the Malaysia Co-investment Fund (MyCIF) was an increase from RM 50 million when it was first introduced in 2019 with the addition of RM 100 million from Bank Pembangunan Malaysia Berhad (BPMB). MyCIF is a co-investment alongside private investors via P2P and Equity Crowdfunding (ECF) platforms that has helped create additional funding sources for MSMEs and spur investor confidence for P2P and ECF investments.

In addition, the government has introduced a 100% stamp duty exemption for successful financing agreements on any registered P2P platform with SC for the next 5 years effective from 1 January 2022 to 31 December 2026. This will reduce financing costs and encourage MSME adoption in P2P financing. Currently, the stamp duty rate is between 0.05% to 0.50%

CapBay’s Co-founder and CEO, Ang Xing Xian, lauded the announcement of the Budget 2022 that focuses on supporting MSMEs and the contribution of ECF and P2P fintechs to the Malaysian economy..

Ang Xing Xian, Co-founder and CEO of CapBay

“The P2P financing industry has proven to be pivotal in economic recoveries in other developed countries. The additional MyCIF allocation and stamp duty exemption will help make P2P financing an affordable channel for MSMEs to raise funds during this economic recovery period. We expect adoption in this space to grow exponentially due to additional support and initiatives from the government,” said Ang.

CapBay is one of the largest P2P players, having funded over RM 400m on its P2P Financing platform since the start of the pandemic while their investors have generated net returns (after fees) of up to 10% p.a. with <0.1% default rate.