The Government is committed to provide an alternative pathway for SME to access financing by crowding in private investors to invest into viable SMEs through SME Investment Partner (SIP) Programme.
YB Datuk Seri Mohd Redzuan Yusof, Minister of Entrepreneur Development launched the programme, with the announcement of its two SME partners namely Warisan Quantum Management Sdn Bhd and RHL Ventures Sdn Bhd.
The Programme is a co-funding initiative between the Government and private sector with the objective to enhance access to financing for SMEs, particularly those at early stage through the provision of risk capital financing.
One of the High Impact Programmes (HIPs) under the SME Masterplan (2012-2020) is implemented by SME Corp Malaysia, an agency under the Ministry of Entrepreneur Development. Under this programme, SME Corp. Malaysia will appoint the fund management firm referred to as SME Partner who is responsible to raise funds from private investors which will be matched by funds from the Government through SME Corp. Malaysia.
The Programme will complement existing financing landscape for SMEs through the offers of both equity and debt financing to meet SMEs financing needs; finance mainly early-stage SMEs between 1 to 3 years in operation; and covers SMEs in all sectors including main street firms that have strong high growth potential, innovativeness as well as in newly emerging areas. This is better spread compared to current venture capital financing which are mainly for technology-based companies.
Thus far, a total of RM90 million have been raised and are now ready for investment into potential SMEs from initial seed funds of RM40 million by the Government via SME Corp. Malaysia. Both SME Partners, Warisan Quantum Management Sdn Bhd and RHL Ventures Sdn Bhd have successfully raised up to RM 50 million funds to be matched with the Government seed funds.
Currently, SME Corp. Malaysia has identified more than 150 potential deal flows from existing SME development programmes such as Tunas Usahawan Belia Bumiputera (TUBE) and other programmes implemented in collaboration with PlaTCOM Ventures, MaGIC and Yayasan Inovasi Malaysia (YIM) for preliminary assessment under the SIP Programme.
Successful investment into SMEs are subject to further due diligence exercise by the SME Partners on the viability of the business model and potential growth of the SMEs.