SARANA to boost MSME through P2P financing solutions

The Securities Commission Malaysia (SC) has introduced SARANA, an alternative financing scheme aimed at addressing the working capital needs of Micro, Small, and Medium Enterprises (MSMEs) and small contractors engaged in government contracts. Effective immediately, this scheme is facilitated by nine SC-registered peer-to-peer (P2P) financing platforms.

SARANA provides two tailored financing options to address the varied needs of businesses. The first, Invoice Financing, is designed to support cash flow by providing funds after the delivery of a contract, ensuring businesses can maintain liquidity.

The second, Contract Implementation Financing, offers pre-financing to cover initial working capital needs before a project commences, enabling contractors to manage upfront expenses effectively.

Together, these options ensure that MSMEs and small contractors participating in government contracts have access to essential funding, reducing their reliance on traditional financing sources. Participating P2P platforms include Bay Smart Capital Ventures, microLEAP PLT, Modalku Ventures, and others, with several offering Shariah-compliant financing.

Government Backing for P2P Financing

SARANA aligns with the SC’s 5-Year Roadmap (2024-2028) to catalyse MSME and MTC (Mid-Tier Companies) access to the capital market. With the government highlighting its support for P2P financing during the Budget 2025 tabling, this initiative seeks to close critical funding gaps, especially for businesses in supply, service, and works sectors.

Since its inception in 2016, Malaysia’s P2P financing industry has raised RM7.9 billion as of September 2024, benefiting locally incorporated companies. By leveraging technology, P2P platforms provide a faster, more flexible alternative to traditional financial institutions.

Tunku Danny Nasaifuddin Mudzaffar, CEO of microLEAP, emphasized the transformational impact of these platforms, “SMEs are the backbone of Malaysia’s economy, but many still face barriers to securing the capital they need to grow. Platforms like microLEAP are not just filling a gap, but transforming the way businesses access financing.”

microLEAP: Driving Financial Inclusion and Growth

As a key participant in SARANA, microLEAP is championing financial inclusion through Shariah-compliant financing. In 2024, 207 out of 208 of its investment notes were fully compliant with Islamic finance principles.

“Invoice financing is a game-changer for SMEs and contractors. It turns unpaid invoices into immediate cash flow, ensuring businesses can fulfil contracts, pay suppliers, and seize new opportunities,” added Tunku Danny.

In 2024, microLEAP disbursed RM125 million in financing, marking an exceptional 101% year-on-year growth. With a low default rate of 0.63%—a 41.1% improvement from the previous year—the platform has earned the confidence of both investors and borrowers alike.

As the only P2P platform with offices in five key states, including Sabah and Sarawak, microLEAP ensures accessibility even in underserved rural areas.

A Bright Future for Alternative Financing

SARANA’s introduction reflects Malaysia’s broader vision to maintain leadership in global Islamic finance while bolstering its economy. The SC’s roadmap provides a structured framework to drive innovation and growth in the P2P financing ecosystem.

“With SARANA, we’re not just providing financing—we’re empowering businesses to grow, scale, and compete in an increasingly demanding environment,” said Tunku Danny.

By bridging the gap between underserved MSMEs and investors, initiatives like SARANA and platforms such as microLEAP are reshaping Malaysia’s financial landscape, ensuring no business is left behind.