Property crowdfunding may help some segments of society to own homes, says pitchIN

KUALA LUMPUR (Jan 15): The introduction of property crowdfunding is expected to serve certain segments of society that find it difficult to own a property, said pitchIN CEO Sam Shafie.

“From what we know, banks are happy to give money to those who want to buy property but there is a segment of the society that still can’t afford [to borrow]. And I suppose property crowdfunding, and schemes like FundMyHome the SC (Securities Commission Malaysia) will introduce the framework for this, are to help those segments of society which can’t afford to buy property,” he told reporters after the release of the pitchIN Equity Crowdfunding Report 2018 today.

“It is interesting that the government sees property crowdfunding as a way to help first [time] homebuyers to buy a property. I think all of us are looking forward to see that framework when it is ready by the end of the first quarter [this year],” he added.

In November last year, SC said it will be reviewing the details of its Guidelines on Recognised Markets (RMO Guidelines) to facilitate the establishment of property crowdfunding platforms as announced in Budget 2019.

The property crowdfunding and peer-to-peer financing framework is expected to come into effect in the first quarter of 2019 and it will balance promoting innovation with ensuring proper safeguards to protect the integrity of the scheme and investors' interest.

pitchIN co-founder and chief strategy officer Kashminder Singh believes that there will be a future for property crowdfunding in Malaysia once the regulations and legal framework are ironed out by SC.

“We think all kinds of crowdfunding is interesting. We do equity [crowdfunding], others do P2P (peer-to-peer) financing and obviously now, property crowdfunding is also coming up. I think Malaysia is ready for all kinds of crowdfunding as long as [they] are properly regulated. Once SC come out with the regulations, I think there will be a future for property crowdfunding,” he told EdgeProp.my

“I do see that there were some interest when the announcement was made by EdgeProp Sdn Bhd about FundMyHome. I don’t have any details of how [FundMyHome] is doing but I do know that there has been a fair amount of interest, even from other players looking to see how they can do property crowdfunding,” he said.

Incorporated in 2012, pitchIN is an equity crowdfunding platform operator registered with SC and it achieve a 75% market share in the total fund raised by the equity crowdfunding industry in 2018.

According to the pitchIN Equity Crowdfunding Report 2018, the platform raised some RM13.6 million for the eight deals that were successfully run on the platform last year.