Developing a Framework of Equity Crowdfunding for Small and Medium Enterprises (SMEs) in Malaysia: A Conceptual Paper

Nor Khadijah Mohd Azhari, Radziah Mahmud and Noor Ashikin Basarudin
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Nor Khadijah Mohd Azhari: Universiti Teknologi Mara, Cawangan Pulau Pinang, Malaysia
Radziah Mahmud: Universiti Teknologi Mara, Cawangan Pulau Pinang, Malaysia
Noor Ashikin Basarudin: Universiti Teknologi Mara, Cawangan Pulau Pinang, Malaysia

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 10, 1635-1642

Abstract: The Covid-19 pandemic has affected the global economic turmoil leading to the global recession around the world. This will adversely affect Malaysia’s small and medium enterprises (SMEs) sustainability. Companies with less than three years of operations face various challenges tapping into funding facilities as banks will prioritise existing customers with good track records. An alternative avenue for funding and financing is necessary to survive in the business. To gain holistic understanding of the ECF, this study has four objectives: (1) To uncover the roles of ECF to SMEs in the time of crisis; (2) To investigate the crucial influencing factors to success the crowdfunding campaigns; (3) To explore the roles of regulation to protect investor and issuers in equity crowdfunding; (4) To develop a framework for fundraisers to ensure their successful campaign. This study will employ a mixed-method approach to achieve the objectives. The interview will be conducted with registered ECF operators, and the questionnaire will be distributed to ECF fundraisers. Since different data sources will be used, the data preparation is divided into web scrapping and text extraction. Python programming language and scrapper library, known as Beautiful Soup, will used to obtain the company’s details, while text extraction will be performed on the pdf files. Therefore, Python library known as PyPDF2 will be used to extract data from PDF files. It is hoped that the findings and proposed framework can assist the government and policymakers in enhancing successful applicant campaigns and improving the investors’ protection legal framework. Along with the national agenda, namely Sustainability Development Goal (SDG) 8 and the Strategic Thrust 1 of the Shared Prosperity Vision 2030, successful SMEs are vital as they can create jobs opportunity for the local community and foster economic growth through more and large pool of investments.

Date: 2024
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