KUALA LUMPUR, 12 May 2020 – Following the recent announcement by the Minister of Science, Technology and Innovation, Yang Berhormat Khairy Jamaluddin, on a new funding relief facility for technology start-ups, Malaysia Debt Ventures Berhad (MDV) on 11 May 2020 announced the detailed framework, eligibility requirements and application processes of the RM100.00 million Technology Start-Ups Funding Relief Facility (TSFRF).
The facility, which is targeted to benefit between 40 to 60 Malaysian technology start-ups, will be available for applications for the first start-ups cohort beginning 18 May 2020 until 31 May 2020.
Subsequent application windows will be opened until the entire fund of RM100.00 million is fully committed. The TSFRF will be funded via a soft-loan from the Government to MDV.
The TSFRF was developed following a series of engagement sessions with technology startups; Venture Capital (VC) firms; MDV’s stakeholders i.e. the Ministry of Science, Technology and Innovation (MOSTI), and the Ministry of Finance (MOF); as well as key enablers in the technology sector namely Cradle Fund Sdn Bhd (Cradle); Malaysia Venture Capital Management Berhad (MAVCAP); the Malaysian Global Innovation and Creativity Centre (MaGIC); and Malaysia Digital Economy Corporation (MDEC).
Cradle, MAVCAP, MaGIC and MDEC in particular, had provided requirements of their constituent companies and facilitated the development of the TSFRF. Each agency will also provide access to the tech start-ups within its purview for application of the programme.
The TSFRF, which is offered in the form of working capital and business expansion requirements, aims to provide immediate, affordable and targeted cashflow support for VC or Government Agency- backed technology start-ups companies that are impacted by the current adverse economic conditions and funding disruptions.
This is to ensure that they are able to sustain their business operations during this difficult time. The TSFRF facility will be offered at an interest rate of 3.50% per annum on the amount outstanding.
MDV’s Chief Executive Officer (CEO) Nizam Mohamed Nadzri mentioned that the TSFRF is meant to address liquidity challenges faced by tech start-ups in this current period by having on-hand working capital facilities to mitigate cashflow issues going forward.
It is also meant to shorten time-to-money with lesser application requirements; shorter due diligence and credit assessment processes; minimal legal documentation requirements; and quick disbursement processes.
Nizam added that most importantly, no hard collateral is needed under the TSFRF. As part of the risk mitigation measure, applicants are only required to provide personal guarantee and debenture.
He further elaborated that the TSFRF is similar to a revolving credit facility, which means that disbursement can be requested on demand or based on a 6 month rolling cash flow requirements per applicant.
For further information on the TSFRF, please visit MDV’s website.