Malaysia Debt Ventures (MDV) has launched a small-contract financing scheme for ICT projects valued between RM250,000 (US$73,436) and RM2 million (US$587,485).
The small-contract financing offered by MDV provides financing of up to 85 percent of a project's contract value and loan tenure of up to three years, depending on the amount borrowed. It's targeted at small and medium-sized industries.
Interest rates for loans are slightly lower than those offered by commercial banks and are fixed at 6 percent to 8 percent per annum for the duration of the loan period, calculated on a daily basis.
There are no fees incurred for loan application. Loan approval will take no more than 14 working days from the date of submission of completed documents.
Wholly owned by the Ministry of Finance, MDV is the debt-financing vehicle that is much needed by technopreneurs looking for alternatives to venture capital, which is much harder to come by.
Because it has a development role to play, MDV's terms are a lot softer than what you'd get from a commercial loan, not just in terms of interest rates but also the flexibility of loan repayment scheduling.
It would be great if they were allowed to offer options to convert debt to equity. This is something they currently cannot do, but my understanding is that they are trying to lobby the government to allow this.