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PETALING JAYA: Digital asset exchanges in Malaysia continue to thrive this year, with over 300,000 new accounts created so far. Since its introduction in 2019, the volume of digital assets traded has surpassed a billion, with a value in excess of RM16 billion as at September 2021.

“New digital investment management or DIM entrants have contributed to the segment’s assets under management growth. In fact, compared to last year, our eight licensed DIM holders have opened 90% more DIM accounts this year,“ Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Albar Syed Zaid said at the SCxSC Fintech Conference today.

DIM also continues to appeal to the younger generation with nearly three-fourths of investors are under the age of 35.9 While nearly 70% of DIM account holders are men, women-held accounts have nearly doubled since December last year – a positive step towards closing the gender investment gap.

“The increased demand for online brokerage services has resulted in a nearly 35% increase in new accounts opened as of July,“ he said.

During the pandemic, the SC noted encouraging developments where equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms continued to meet and support the funding needs of micro, small and medium enterprises (MSMEs).

There are currently 21 ECF and P2P platforms registered with the SC, which have collectively raised more than RM2.2 billion for close to 4,000 MSMEs since their inception. Despite an initial decline in fundraising activities due to the movement control order in the first quarter of 2020, the SC stated that these alternative platforms had assisted MSMEs in raising more than RM1.3 billion in 2020.

In the first half of 2021 alone, a further RM625 million was raised through ECF and P2P, an increase of 151% and 220% respectively, compared to the same period in 2020. ECF and P2P attracted young investors with nearly 60% of participants aged below 35.

Fintech could be a key enabler in re-building the Malaysian economy as the country recovers from the pandemic. The regulator also said it would seek to drive greater adoption of digital capability to enhance capital formation efficiencies and increase investor participation in the capital market.

Syed Zaid also emphasised the importance of technology and fintech in shaping the capital market ecosystem.

“Technology is in fact one of the main thrusts of the Capital Market Masterplan 3, where we envision greater use of digital capability to facilitate fundraising for companies of all sizes while encouraging market innovation and financial inclusion.

“We have seen how small businesses have been badly impacted by the global response to the pandemic. Last year, small and medium enterprises’ (SMEs) GDP contracted 7.3%, sharper than the decline in Malaysia’s GDP and non-SMEs GDP which shrank by 5.6% and 4.6% respectively. This is the first time in 17 years that SME GDP has been lower than Malaysia’s GDP.”

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