Reported by Divagar

On the 15th of May 2020, Richard Wee Chambers (“RWC”) in collaboration with Brickfields Asia College (BAC) has proudly hosted an Onward Webinar Series on the “Startups, Fintech & Technology: The Way Forward (A dialogue of post-lockdown growth, policies & investment)” via Zoom platform. It was a great honour and pleasure for RWC to have two well known speakers in the area of Fintech, technology and Investment Ms.Rina Neoh, Director of MATRADE and on the other side Mr.Norhizam Kadir, Vice President of Fintech and Islamic Digital Economy.

The primary purpose of this is to discuss the topic of moving forward with Fintech and technologies which in a way are able to design a solution , create a roadmap and provide ideas to the listeners and also to all the respective stakeholders. Based on the past 2 month observation in the flow of Covid-19 lockdown in Malaysia, the new normal not only will take place in the past few weeks but also it also will impact Post Covid-19 in a way we work and play throughout our daily routine. There is an economic impact due to this new normal which we can see through the Bank Negara prediction release where Malaysia Economic Forecast estimated the growth will be -2.00  to -2.05 Gross Domestic Product (GDP). Even Though it is a forecast, it can be seen that the Malaysian economy is still not striving forward much. However, we must ensure and be in a preparatory mode to face the worst for whatever reason post Covid-19.

For a startup, the Government has focused and put a lot of effort in investment through Malaysian Digital Economy Corporation (MDEC) where MDEC as a digital economy development agency always looks at what is available in future and the shaping of future for the economy growth of the nation through the engagement with related industries. Largely, startups are coming from Small Medium Enterprise (SMEs) where 98.5% of registered companies in Malaysia are known as SMEs. SMEs generate almost 38% of Malaysian Economy. Thus, SMEs are one of the important pillars in sustaining national economy growth.

Recently the Government has launched some stimulus packages such as Geran Khas Prihatin(GKP), Program Subsidi Upah, loan deferment and moratorium and other forms of support to help out the SMEs in overall or by least out of RM200 million stimulus package which has been announced by our Prime Minister Tan Sri Muhyidin Yassin. However, it should be noted that the Government would not be able to cater SMEs all the time. On another point, this is the best time for all the SMEs to repackaging and rebranding the business. Through this new strategy, the business would work in line with the new normal. Nevertheless a  study said that 40% of the startups would not be able to survive till May 2020, but through re-strategise and restructuring business plans, the SMEs are able to overcome the collapse as we don’t have an option but we need to change an immersion into a new normal.

On the other hand, for investment, the new normal is going to stay much longer than what we have assumed. Looking from an investor perspective or point of view, this is a best opportunity for many investors to pick up in a startup business because there will be more opportunity out there due to depreciation in valuation and etc. Investors would always look at the turnover or profit that would be gained through the investment in new startups. Each and every investor also would have a different perspective and opinion in investing by taking into account many other factors such as the turnover, geography, portfolio of business etc. It is always advised that all the new startups should do the necessary research and ground work before approaching the investors as it will give more reliability and resilience. 

The next question that could arise is the regulation for startups, Fintech and technologies. Thus, putting this into a pandemic context, regulation always comes with pros and cons. Where even the whole world sees there is a need for flexibility in managing the regulations. While putting it into a context of startups and Fintech companies, Fintech is one of the highly regulated vertically businesses as it deals with financial transactions. On the other hand, we can see that Bank Negara is widely encouraging the cashless mode of transaction. Currently it is better than ever that more regulation and policy do take place and in positions. As we are in tough times, the cash flow must be maintained for sustainability, however the investment also should be done in this pandemic period. So, for the years to come , we are able to face similar challenges which we could face on the road.

All savvy investors will take advantage and leverage on the situation whether it’s micro or macro. From an angel investor perspective, usually angel investors always invest in the business or industry they know and the geography they in as this is the best time for cross border investment. However, there is always a grey side where there will be a rise in trust issues as people are strangers through this cross border transaction as many investors would only invest in a startup business that allowed their own value dictation.

In summary, do hope the Government will look into a regulation for Fintech and come out with a piece of well rounded regulations to ensure the security in place. On the other hand, MDEC as a development agency also has come out with a lot of programmes such as E-Usahawan, E-Rezeki and Go-ecommerce to help out the B40 category in embracing digital technologies and also to ensure the productivity continues through digital platforms. Our mindset should be well prepared and accepted to embrace the new normal and together be mindful and aware of our surroundings on what people want as a startup.

Published on May 17th, 2020

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