· Tech funding agencies under MOSTI committed to playing a substantial role in easing financial burden of technology companies
· MDV to offer moratorium on loan repayment for technologies companies affected to support the companies through tough times and help bridge their cash flow gap
· Government would likely introduce other economic stimulus in stages depending on the urgent needs and requirements of businesses and the Rakyat

KUALA LUMPUR, March 31 (Bernama) -- Malaysia Debt Ventures Berhad (MDV) yesterday jointly organised a web-based seminar (webinar) for startups with the Ministry of Science, Technology & Innovation (MOSTI), Cradle Fund Sdn. Bhd. (Cradle) and Malaysia Venture Capital Management Berhad (MAVCAP) on the topic Building Resilience In The Tech Sector.

Minister of Science, Technology & Innovation, Yang Berhormat Khairy Jamaluddin, acted as moderator for the panel session together with Nizam Mohamed Nadzri, Chief Executive Officer (CEO) of MDV; Razif Abdul Aziz, Acting Group CEO of Cradle; and Shahril Anas Hasan Aziz, Acting CEO of MAVCAP; as the panel speakers. The webinar was hosted via Zoom with participation by 80 representatives from various tech-based Small Medium Enterprises (SMEs) and startups; and it was also streamed via Facebook live.

The webinar, among others, discussed on present challenges faced by businesses, particularly SMEs & startups, due to the COVID-19 outbreak as well as the enforcement of the Movement Control Order (MCO), and measures that businesses may adopt in mitigating these challenges. It also highlighted initiatives introduced by the Government in addressing the issue and expounded on the roles of MDV, Cradle & MAVCAP in easing the financial burdens of Malaysian technology companies.

In his opening remark, YB Khairy assured that the Government will continue to support the SMEs and startups through this challenging times to ensure their survival particularly given that they are the backbone of Malaysia’s economy with about 38.3% or RM606.4 billion in contribution to the country’s GDP in 2018. This commitment is reiterated in the RM250 billion Pakej Rangsangan Ekonomi Prihatin Rakyat (PRIHATIN) in which the Government has committed RM100.0 billion to support businesses, including SMEs. This is in addition to the many other initiatives being introduced such as access to financing with cheaper profit/interest rate, non-collateral financing and moratorium on income tax payment for three months.

“PRIHATIN as announced by our Prime Minister is a comprehensive stimulus package meant to rescue the country’s economy and it prioritises the wellbeing and safety of the Rakyat amid this unprecedented and tough period. It also addresses pertinent issues such as helping businesses to maintain their liquidity and to cushion the impact of the Covid-19 pandemic,” explained YB Khairy. “Without aggressive measures in place, vulnerable segment of businesses such as the SMEs, would have no choice but to close down operations, which would then create mass unemployment in the short and medium term, and this is what the Government wants to avoid.”

As the impact of the COVID-19 outbreak on the economy is not expected to ease anytime soon, YB Khairy assured that the Government would likely introduce other economic stimulus in stages depending on the urgent needs and requirements of businesses and the Rakyat. And MOSTI will ensure that the hardships of the technology-based businesses will continue to be addressed.

In MDV’s context, Nizam explained that given the challenges faced by its customers, MDV is committed to alleviating their burdens through measures such as expediting its evaluation process to ensure timely availability of funds and accelerating disbursements for customers to enable capacity building.

“MDV's venture debt and financing for startups may also be offered to bridge equity rounds and extend startups' runways,” said Nizam.

In addition, in line with the recent announcement by Bank Negara Malaysia (BNM) on automatic moratorium on loan repayments for SMEs to relieve the burden on businesses and households expected to be affected by the Covid-19 outbreak, MDV will also offer moratorium on loan repayment for technologies companies affected to support the companies through tough times and help bridge their cash flow gap.

“For customers who have obtained project financing or contract financing with MDV, we are opened to consider either to reschedule or restructure their financing to help bridge their cash flows,” he said.

On discussing the roles of funding agencies in the current setting during the panel session, Cradle and MAVCAP also echoed similar sentiment as MDV in reaffirming that they will continue to provide grants and capital for technology startups despite the inevitable slowdown expected in the overall investment pace.

However, beyond merely providing more funds into the technology space, all three agencies agreed that equal focus will also be spent on the development of a comprehensive and supportive startups ecosystem through initiatives such as coaching, networking and sharing of resources to enhance startups’ overall resilience.

Nizam added that despite the unpredictable outlook, the challenging situation also presents an opportunity that companies can capitalise on beyond short-term monetary gain.

“Large corporations and public sector should consider sourcing technology from local companies – prioritise adoption of Malaysian technology. At the same time local companies can embark on enterprise solutions as potential market and to prioritise digitalisation of large corporates to address gaps identified during this period” he said.

“My final advice to startups would be for them to strengthen their liquidity by leveraging their equity with debt – and this is an area where MDV may be able to assist,” concluded Nizam.

About MDV – The Nation’s Technology Financier

Malaysia Debt Ventures Berhad (MDV) is a wholly-owned subsidiary of the Minister of Finance Incorporated established in 2002 with the objective of providing flexible and innovative financing to develop high-impact and technology-driven sectors of the economy, identified and prioritised by the Government as future engines of growth. MDV’s strategic role in the technology financing ecosystem in Malaysia is defined by its approach to funding which is different from other financial institutions. MDV’s niche is helping to fund young technology-based companies or startups that are unable to secure financing from commercial financial institutions due to their novel business model, lack of proven operating track record and lack of collaterals. With the rapid rate of technological and digital advance, and Malaysia’s continued push towards becoming an advanced nation, MDV will continue to have a significant role to play particularly in financing emerging technology areas and in achieving its vision of becoming the Nation’s Technology Financier.

For more information on MDV, visit http://www.mdv.com.my/

SOURCE:  Malaysia Debt Ventures Berhad

FOR MORE INFORMATION, PLEASE CONTACT: 
Name: Amelia Ong Abdullah
Senior Assistant Vice President, PR & Communications
Malaysia Debt Ventures Berhad
Tel: 03 – 2617 2841
Email: amelia@mdv.com.my

--BERNAMA