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BUDGET 2013: Venture company MDV to launch intellectual property fund for SMEs

-Malaysian Reserve

Venture capital fund company Malaysia Debt Ventures Bhd (MDV) will start lending money to small to medium enterprises (SMEs) who wish to develop intellectual property (IP) in the first-quarter of 2013.

As part of the government’s 2013 budget allocations to inculcate innovation and increase productivity, RM200 million has been set aside under the IP financing fund scheme, which will be offered through MDV.

Under the scheme, the government will provide a 2% interest rate subsidy and guarantee of 50% through Credit Guarantee Corp Malaysia Bhd.

SMEs with IP rights (IPRs) will be able to use their IPRs as collateral to obtain funding.

MDV managing director and chief executive officer Md Zubir Ansori Yahaya said the government’s decision to establish the IP fund would spur more investments for companies with high technology capabilites, in turn encouraging innovation.

“IP is relatively new to Malaysia compared to more developed countries, but the government has recognised its part in propelling the nation forward toward becoming a high-income nation,” Md Zubir told The Malaysian Reserve after the budget announcement last Friday.

The move will help alleviate the difficulties that some technology-focused companies face when attempting to get funding from financial institutions.

“Banks are not so willing to finance these companies because of the soft collateral. The RM200 million will provide an impetus to high-tech companies, and provide access to easy financing for them. This will definitely encourage companies with IP to seek funding,” he said.

To allow SMEs to put up their IPRs as collateral, the government will set up a valuation model to value and commercialise IPRs in the market.

A total of RM19 million has been allocated to create an IPR market platform as well as set up training courses for IP evaluators.

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