Malaysia is the latest Asian country to announce it wants to be a startup hub with the Securities Commission revealing it was looking at ways to improve financing supply. This would allow the country to provide startups and SMEs with a platform that makes it easier for them to find success.
Securities Commission Chairman Datuk Seri Awang Adek Hussin stated that Malaysia could become a startup hub by deepening the pool of capital they have access to as well as encouraging Malaysia’s investor community to invest in the startup ecosystem.
He also told The Star that SMEs and startups played an essential role in driving activities at the national and state levels. It’s estimated they contribute half of the country’s gross domestic product (GDP), although this group has far fewer financing options at their disposal.
“Given the importance of SMEs to the economy, it is crucial to address the supply-demand gap for financing these businesses,” he said at a recent event. “This will facilitate them to grow and contribute more to the real economy as well as potentially going for listing in the stock exchange.”
Currently, Malaysian startups and SMEs face higher risks and lower survival rates than larger firms due to this lack of financing. There is a major shortfall of sustainable funding available and traditional bank loans don’t really meet their financing needs.
While the Securities Commission has included a few initiatives aimed at supporting SMEs in the most recent budgets, it also admits that several gaps remain. These hinder the ability of startups to survive and thrive in the country.
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Interesting Analysis
Malaysia wants to be a startup hub. Then again, so does every country in Asia. The issue is that most talk the talk but don’t actually follow through when it comes to fostering a thriving ecosystem that allows new firms to flourish.
Identifying an issue is the first step so credit the Securities Commission for that. However, doing something about these challenges extends past words or some token actions is what really matters. We’ll see if progress is made toward Malaysia becoming a more viable place for startups but more often than not, this talk goes nowhere.
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