The transformation of the stock market to support social enterprises must be the way forward to enable small and medium micro enterprises to gain access to finance from public markets.
WOU’s George Town Institute of Open and Advanced Studies (GIOAS) Chairman Tan Sri Andrew Sheng said this on Astro Awani’s “Notepad with Ibrahim Sani” programme recently.
During the conversation with host Ibrahim Sani, Tan Sri Sheng shared his views on the social stock exchange, a concept based on using capital markets “to help small people help themselves to deal with climate change and uplift their incomes at the same time”.
Defining a social enterprise as an organisation or a community that is able to run a project that will be raising capital in the social stock market, he explained that the platform will be trading zero-coupon, no return instruments to facilitate social impact projects instead of being profit-oriented. Some examples of these projects include community development initiatives such as building a better bridge, providing better education and improving water supply.
Tan Sri Sheng, who is also Distinguished Fellow at the Institute for Capital Market Research Malaysia (ICMR), added that the establishment of the International Sustainability Standards Board under the International Financial Reporting Standards Foundation in 2021 has provided auditors with a set of global guidelines to evaluate projects.
He suggested that a social enterprise that successfully delivered a project in a village may potentially draw investment from a public listed company. “If a social enterprise uses RM50,000 to build a bridge in a village, a public listed company may commit to contribute RM50,000 a year as part of its corporate social responsibility (CSR) activity.”
Tan Sri Sheng also promoted the idea of Smart Villages involving the use of technology and global knowledge to foster local upliftment and environmental restoration.
“If the private sector or government spends money in the kampung (village), the money will go back to the city. What benefits the kampung will benefit the city.
“Let’s now work together to help transform our villages so that they see an upliftment in their income, quality of life and also the environment,” he urged.
Malaysia’s rich diversity in natural resources, languages and cultures, he remarked, presents the nation with opportunities in different areas for growth and change.
Watch the full episode here.