Ministry to find mechanism to increase alternative financing

The Entrepreneur Development and Cooperatives Ministry says it will find a mechanism to increase the percentage of alternative financing such as venture capital and crowdfunding to facilitate capital generation for new businesses.

Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar said currently 95 per cent of financing for local entrepreneurs is from financial institutions while five per cent is from private financing and alternative financing such as crowdfunding.

"For now, we have a list of companies that want to be partners or become venture capitalists to entrepreneurs but there are constraints.

"There are two constraints for venture capitalists, namely the company applying for a venture capital partnership would not want to hand over shares to the venture capitalist, and the cost of venture capital financing is higher than bank or government loans," he said when winding up the debate on the royal address.

He said a social enterprise policy to increase the number of social entrepreneurs would be tabled in two months' time .

"We want to slightly amend the policy on social enterprise and change the regulations on cooperatives structurally," he said, expressing confidence these changes would enhance cooperatives' growth.

-- BERNAMA