KUALA LUMPUR, 12 May 2017 – More than 60 participants, including stakeholders interested in equity crowd funding (ECF), benefitted from a two-day roundtable meeting in Kuala Lumpur that focused on how to promote and facilitate ECF in ASEAN. ECF is a business model which allows a large number of individuals to invest in early-stage or incumbent enterprises in exchange for equity plus a share of the distributed profit in the enterprises concerned.
The meeting also discussed the findings and recommendations from an ECF report on promoting and facilitating ECF for the benefit of micro, small and medium enterprises (MSMEs) in ASEAN.
“ECF can be a game changer for SME finance. It will ease one major pain point dealing with their finances to ensure appropriate funding,” said Mr. Rizal Nainy, SME Corp. Deputy CEO I.
MSMEs are the backbone of ASEAN economies but they have traditionally had very limited access to finance from formal banking institutions. Alternative funding sources, such as business venture and angel capital, private equity funds, or SME Exchanges are not well developed to meet the growing and specific needs of MSMEs in ASEAN. Meanwhile, the development and use of technology and innovation have provided new possibilities and opportunities for the development and commercialization of financial technology innovations and business models to improve financial inclusion and access to capital.
ECF is a financial technology innovation that goes beyond the boundary of the regulatory frameworks in most countries. As a result, securities and exchange regulations have to be amended or specifically introduced to make this financial technology innovation a legally permissible business model as well as to ensure due protection, safety, support and encouragement to the three ECF players and stakeholders – namely the investors, the platform operators, and the enterprises issuing the equity.
The roundtable meeting is jointly organised by SME Corporation Malaysia and ASEAN Coordinating Committee on Micro, Small and Medium Enterprises; and supported by the U.S. Agency for International Development (USAID) through the ASEAN Connectivity through Trade and Investment (US-ACTI) along with ASEAN Secretariat.
About ASEAN Secretariat: The ASEAN Secretariat (ASEC), based in Jakarta, was established in 1976. Its core function is to provide for greater efficiency in the coordination of ASEAN organs and for more effective implementation of regional projects and activities. ASEC strives to be the nerve centre of a strong and confident ASEAN Community that is globally respected for acting in full compliance with the ASEAN Charter and in the best interest of its people.