SC, Agro-based Agencies Eye Alternative Financing for Agriculture Sector

SC, Agro-based Agencies Eye Alternative Financing for Agriculture Sector

  • Better uptake of ECF campaigns in the agriculture sector
  • Alternative funding to address financing needs in agriculture

SC chairman Awang Adek Hussin.

The Securities Commission Malaysia (SC) and key farming agencies have talked about ways to address financing gaps faced simply by micro, small and medium-sized enterprises (MSMEs) involved in the agriculture sector in a bid to improve the country’s foods security.

In a statement, the statutory body mentioned some 40 associates from agencies plus industry players attended a workshop known as GROW , a new collaborative programme under its fintech flagship initiative, SCxSC.

It added that will GROW is really a collaborative effort by the SC and ecosystem partners to utilize the potential of alternative fundraising digital platforms to satisfy the needs of underserved players in tactical sectors, such as farming.

Collateral crowdfunding (ECF) and peer-to-peer (P2P) financing were among the choice financing mechanisms that were addressed during the course as potential methods to help fund the sector, it said.

The particular SC chairman Awang Adek Hussin  pressured on the importance of increasing access to the capital market for local businesses.

“We have seen how technology has democratised funding via digital systems such as ECF and P2P financing.

“We believe these alternative financing avenues have the possible to address some of the funding needs of the MSMEs in the agriculture sector as well, ” said Awang.

Senior officials through relevant ministries, agencies and key players in the agriculture environment attended the one-day workshop.

They include the Ministry of Agriculture plus Food Industry, Federal Agricultural Marketing Power and Agrobank.

At the class, participants called for better ecosystem coordination to advance the agriculture industry forward and reinforce the country’s foods security.

They also emphasised the advantages of greater awareness to the role of option financing for the agriculture sector, SC stated.

Following the workshop, the SOUTH CAROLINA said it programs to have greater business engagements with essential stakeholders next year which includes organising a DEVELOP Fintech Meeting.  

This will be followed by the nationwide GROW roadshow to raise understanding on ECF plus P2P financing as viable funding choices for agro-based MSMEs to grow their businesses, it added.

It said these types of programmes will complement ongoing efforts from the government to support option fundraising by farming businesses such as the Malaysia Co-investment Fund (MyCIF).

MyCIF, a public-private co-investment vehicle administered from the SC on behalf of the particular Ministry of Finance, has observed a larger uptake of ECF campaigns in the agriculture sector after implementing a special ratio of 1: 2 in 2022 for this sector.  

It invests US$0. twenty one (RM1) for every US$0. 42 (RM2) raised from private investors on the participating systems by eligible issuers.

According to the SC, MyCIF has co-invested in a range of agriculture projects in upstream and downstream activities.  

This includes firms applying technology to improve agriculture yields plus aquaculture production.