KUALA LUMPUR (June 1): It's been more than two years since Malaysia became the first Asean country to regulate peer-to-peer (P2P) and equity crowdfunding (ECF) financing industries.

Both are alternative fund raising mechanisms, targeting micro, small and medium enterprises (MSMEs) that have emerged in recent years with the advent of technology.

ECF allows investors to take up stakes in the companies while P2P offers loans to startups.

As at March this year, both financing platforms have collectively raised RM344 million, benefiting close to 900 MSMEs, which are traditionally under-served by the financial system.

However, the capital raised for the local small businesses so far is nowhere near the massive funding gap of up to RM80 billion — as estimated by the Securities Commission Malaysia.

Do these new funding platforms really work to match startups with financiers? What are the challenges?

Read all about it in the latest issue of The Edge. 

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