Govt financier MDV says handing out loans to stop tech firms leaving Malaysia for neighbours

Category: MDV in the News Post Date: April 24, 2019

Govt financier MDV says handing out loans to stop tech firms leaving Malaysia for neighbours

MDV chairman Datuk Seri Lee Kah Choon speaks at a MDV client engagement programme in Seberang Jaya April 24, 2019. — Pictures by Steven KE Ooi
MDV chairman Datuk Seri Lee Kah Choon speaks at a MDV client engagement programme in Seberang Jaya April 24, 2019. — Pictures by Steven KE Ooi

SEBERANG PERAI, April 24 — A government-linked financier, Malaysia Debt Ventures Berhad (MDV), is giving out loans to local startup technology companies in order to stop such companies from leaving the country.

Newly appointed MDV chairman Datuk Seri Lee Kah Choon used e-hailing ride company Grab, that is now a regional giant, as an example of local companies that had unfortunately moved out.

“We don’t want people stealing our jewels. Grab was ours and now Singapore is championing to say that Grab is theirs,” he said in his speech during a MDV client engagement programme at The Light Hotel in Seberang Jaya here.

Grab, now reportedly worth about RM24.8 billion (US$6 billion), was established in 2012 in Malaysia and the company moved its headquarters to Singapore in 2014.

He said Malaysia needs to retain these companies within its shores and cultivate more companies similar to Grab.

He said MDV, which is under the Minister of Finance Inc, has an objective to energise Malaysia as a powerhouse in terms of technology and innovation.

“Through technology and innovation, we will be able to upgrade our economy and upskill Malaysians to be a hub for all these technology,” he said.

Lee said Malaysia is not short of technological and innovative talents but that these local companies needed to energise and upgrade themselves.

He said the aim is for GDV to “give out money” to these local technology firms, small medium enterprises (SME) and start-ups to grow their business.

“We want our companies to be recognised globally, not only in Southeast Asia or in Asia,” he said.

Lee said GDV is looking at financing SMEs and companies along the northern industrial belt which covers Sungai Petani, Kulim, Penang, Taiping and Ipoh.

“This industrial belt is an important area for us to concentrate on so as to move the economy of the country,” he said.

He said local SMEs and even new start-ups can approach MDV for loans if they were unable to obtain loans from commercial banks.

The four areas MDV are looking at for projects to finance included renewable energy, telecommunications and connectivity, digitalisation and technological start-ups.

Lee said the client engagement programme is to promote funding programmes for energy efficiency and fourth industrial revolution projects such as Internet of Things, automation and 3D printing.

“The government is putting money into this industry for a new economy in this sector,” he said.

MDV chief executive officer Nizam Mohamed Nadzri delivers his speech at a MDV client engagement programme in Seberang Jaya April 24, 2019.
MDV chief executive officer Nizam Mohamed Nadzri delivers his speech at a MDV client engagement programme in Seberang Jaya April 24, 2019.

MDV Chief Executive officer Nizam Mohamed Nadzri said MDV has disbursed about RM11.7 billion in funds to about 800 companies since 2002.

MDV’s aggregate fund size now stands at RM4.1 billion, he added.

“We have given out about RM1.5 billion of loans to about 180 companies and each month we are collecting up to RM40 million in repayments which we will channel out again,” he said.

He said the company is also partnering with banks such as SME Bank, Agrobank, Bank Islam and Bank Rakyat to come up with more funding to lend out to applicants.

Lee said MDV is able to finance high risk projects and coupled with government incentives specifically for energy service companies, this can steer the implementation of energy efficiency project in the building sector.

MDV now has a total drawdown of RM500 million to date from its existing RM1 billion Sukuk Murabahah Programme which is from 2017 to 2030.

MDV was also given allocated funds of RM50 million for future energy efficiency projects and RM25 million for IR 4.0, especially for start-ups.