Malaysia Pushes Fintech to Transform Agriculture Sector

The Securities Commission Malaysia (SC) is encouraging the wider adoption of financial technology (fintech) in agriculture in order to help farmers and agribusinesses in achieving the country’s food security agenda.

SC Chairman Awang Adek Hussin said access to finance is critical to agriculture’s future in the Southeast Asian country.

This is especially important for smallholders and ‘agritech-preneurs’ seeking to modernise agriculture and strengthen research and development, he said in his opening address at the recent SCxSC Grow Fintech Conference.

SCxSC GROW, is a new collaborative programme, under the SC’s fintech flagship initiative “Synergistic Collaboration by the SC” (SCxSC). The programme embodies a collaborative effort with partners in the fintech ecosystem to harness the potential of alternative financing digital platforms to meet the needs of micro, small, and medium-sized enterprises (MSME) in strategic sectors.

Recognising the challenges faced by MSMEs in the agriculture sector, Awang Adek said that leveraging fintech solutions will help improve access to financing and increase efficiency in the sector.

To achieve this goal, the SC said it has been working closely with ecosystem players to develop innovative solutions that cater to the unique financing needs of farmers and agribusinesses. This is in tandem with the national agenda to support the agriculture sector’s transition into a dynamic and progressive sector.

“Alternative financing avenues such as equity crowdfunding (ECF) and peer-to-peer (P2P) financing allow investors with the right risk appetite to mobilise capital directly for agri-preneurs,” Awang Adek said.

“This provides more options for younger and high-growth companies to access capital relevant to their business risk profiles,” he added.

Over 7,000 MSMEs have benefited from SC-registered ECF and P2P financing since their introduction in 2015, raising more than RM4.4 billion, with only 600 agri-related MSMEs across the entire value chain raising close to RM300 million. This presents a significant opportunity for agricultural growth and investment.

New cutting-edge solutions were showcased at the conference, highlighting the latest advancements in these fields. The conference also featured local fintech players in the agriculture sector.

These fintech solutions have the potential to revolutionise the way farmers access financing and manage their operations, enabling them to make better use of resources and increase yields.