Malaysia’s first licensed Islamic equity crowdfunding platform eyes 2020 launch date

Securities Commission Malaysia (SC) has revealed its second cohort of regulated market operators for equity crowdfunding (ECF) and peer-to-peer financing (P2P), extending its first Islamic equity crowdfunding license.

Ethis Ventures is a familiar name in the Islamic P2P and crowdfunding space. An offshoot of Singapore’s Ethis Group, one of the earliest Islamic property crowdfunding platforms globally, the Kuala Lumpur-based Islamic fintech venture builder is expecting to operate in the Malaysian equity crowdfunding sphere by March 2020.

“We are very excited to have this chance to open up a new asset class to all levels and types of investors,” said Maritz Mansor, the group’s chief investment officer. “In most markets, a majority of the investments flowing into equity crowdfunding is from institutions and sophisticated investors. At the same time the minimum investment is low which means that ordinary people can invest alongside these professional investors.”

To employ either a Musharakah or Mudarabah model, the upcoming platform will focus on supporting local SMEs, a market segment where over 900 businesses have raised some RM350 million (US$84.97 million) through P2P and crowdfunding platforms since 2017, according to latest figures from the SC. The lion share is however contributed by P2P players: ECF operators account for RM49.48 million (US$12.01 million) in financing for 52 issuers by the end of the first quarter – none of which were conducted in a Shariah compliant manner.

“SMEs are the backbone of the economy. Start-ups are the future challengers to the status quo. For Malaysia to continue to be a leading economy in the Muslim world and maintain its position as the top Islamic finance country, it must embrace and rapidly adopt equity crowdfunding,” believes Ethis Group Chairman Mohd Radzif Yunus.

Ethis Ventures was granted an Islamic P2P license in 2018, under which it launched NusaKapital, the world’s first regulated fully-fledged Islamic crowdfunding platform. It is also behind the Global Sadaqah platform. 

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