Previously restricted, Malaysia’s Hajj pilgrim fund will now be able to park money into investment accounts and is likely to invest into the country’s sole Islamic bank-mediated crowdfunding platform, a move which could potentially attract other government-linked companies (GLICs) to follow suit.
The Investment Account Platform (IAP), a Bank Negara Malaysia initiative, has been authorized by Lembaga Tabung Haji (LTH) to channel the latter’s funds to finance ventures and projects, IFN has learned. LTH, which manages RM75.41 billion (US$17.44 billion) in depositor savings at the end of 2019, is in discussions with the IAP to potentially finance — either in part or in full — an infrastructure project, the construction of a hospital in West Malaysia.
The structuring of LTH’s involvement and the financing of the project, which would have a ballpark figure of about RM200 million (US$46.26 million), is still in the works.
It is understood that the IAP is also in exploratory talks with the IsDB to have the multilateral organization come on board as an institutional investor. Initially conceptualized as a digital platform to facilitate funding from the public, particularly the retail segment, for SMEs, the IAP’s business model has experienced a few permutations; it is now focusing on blended finance, that is crowdfunding combining investments from individual investors, corporates and institutions.
“This is quite a milestone and hopefully other GLICs will follow suit,” shares Joann Enriquez, CEO of the IAP. Speaking to IFN, Enriquez elaborated that the platform over the last year has been working toward re-tweaking its mechanism and focusing on listing bigger projects to capture the institutional investment flow. The value of the upcoming hospital project listing would equal — if not worth more — the RM200 million raised via the 13 projects listed on the IAP since its inception in 2016.
It is also learned that the IAP model could be exported to other countries, particularly IsDB member countries, depending on the success of the IsDB’s IAP participation.
“Apart from the hospital discussion, there is a discussion to utilize our model for the use of the fund that the IsDB is putting together for COVID-19 relief for member countries,” Enriquez revealed, adding: “From now until June, you will see a lot of ‘make or break’ situations that will bring us to the next level or see us redefine our processes. What we’ve worked for in the past year is now ripe and hopefully it will bring us to the next level where we can have all these reputable partners bring us to levels we’ve never seen in Malaysia and outside of Malaysia as well.”