The Securities Commission (SC) is considering the introduction of a trade sale board aimed at promoting private companies to investors. The proposed board will feature a listing and search functionality, enabling micro, small, and medium enterprises (MSMEs) and mid-tier companies (MTCs) to showcase their business details for trade matching.
This initiative, part of the “Catalysing MSME and MTC Access to the Capital Market: Five-Year Roadmap” report, is designed to facilitate connections between companies and potential investors.
Source: https://ms.wikipedia.org
This initiative is expected to enhance the infrastructure and mechanisms for fundraising and trade sales. Moreover, the SC plans to develop a factoring information platform for MSMEs and MTCs, promoting the use of factoring to expand their access to working capital. Factoring allows companies to meet short-term cash needs by selling their receivables for immediate cash injections from factoring companies. Furthermore, the SC’s initiative draws from the experience of the Mexican development bank, Nacional Financiera (NAFIN) which developed an online factoring platform called Cadenas Productivas.
This platform connects large buyers with small suppliers, enabling suppliers to access working capital financing through factoring transactions with participating financial institutions. The programme operates online, reducing costs and facilitating almost instantaneous transactions.
The above developments should be welcomed as it facilitates greater activity in M&A and working capital access. This is an admission that investment banks, commercial banks and others are not helpful to those in need of equity or working capital. I am for more competition, which will only benefit the SMEs and others in securing funding at reasonable costs as opposed to loan sharks!
Reference:
SC proposes trade sale board to attract investors to private companies, Eynez Syazmeena, Focus Malaysia, 23 May 2024
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