For Part 3 – Kashminder Singh – PitchIN


In Part 2 we covered early practical implementations and solutions along Malaysia’s road to full Industry 4.0 which were presented at the Industry 4.0, Demystify, Funding & Roadmap Conference at the Petaling Jaya Hilton on 30 April 2019, jointly organised by the Malaysian National Computer Confederation (MNCC) together with the Malaysia Productivity Corporation (MPC) and P2P Talent Development PLT (P2P).

In this 3rd and final part, we will look at available government and private funding options available to businesses which want to embark on their Industry4WRD journey.

Government funding

“The main item in the Industry4WRD national policy is businesses readiness for Industry 4.0 and the government’s objective is to help small-to-medium enterprises achieve Industry 4.0 readiness, conduct pilot programmes so they can move forward and improve their productivity”, said Farez Amha Abdullah, Senior Deputy Director, Advanced Technology and R&D Division, Malaysian Investment Development Authority (MIDA).

“An important part of Industry4WRD is for companies to register online for assessment by an assessor appointed by MITI”, Farez added. The full assessment report costs RM7,000.

MIDA has a range of incentives to help various industries in their Industry4WRD journey and can provide them with a matching grant of up to 40% of the costs but they must first undergo a readiness assessment.

Industry Digitalisation Transformation Fund

“Henry Ford’s golden rule was to make the best quality cars at the lowest possible price and to pay his workers the highest possible wages, so in future, we must have high-skilled, not low-skilled workers”, said Ahmad Mochtar Hashim, Chief Business Officer, Bank Pembangunan Malaysia Bhd – a wholly government-owned bank through Minister of Finance Incorporated.

“However, back then, Ford could only provide his customers with a choice of only black-coloured cars but today, Industry 4.0 enables automotive manufacturers to customise choices of cars”, he added.

Formerly known as SME Bank (founded in 1973), Bank Pembangunan initially funded infrastructure projects such as Penang Bridge, ports, the KLIA Express Rail Link and so forth and today it funds sustainable development, public transport and other projects.

Through its Industry Digitalisation Transformation Fund (IDTF), Bank Pembangunan has allocated RM3 billion to help manufacturers adopt Industry 4.0 related technologies.

The fund also provides part financing for the the acquisition and/or development of specific assets, including software, licences, patents and so forth, part financing for projects / contracts relevant to the digital technologies, and to provide working capital.

The fund is also available to foreign direct investors which incorporate a subsidiary in Malaysia, even with majority foreign equity.

IDTF was introduced on 1 January 2019 and will be available until 31 December 2020.

“Have a plan, then come and see us”, said Ahmad Mochtar.

Government guarantor

Prokhas Sdn Bhd, wholly owned by Minister of Finance Incorporated does not provide loans directly, but it manages a sister company, Syarikat Jaminan Pembiayaan Perniagaan (SJPP), also wholly-owned by Minister of Finance Incorporated, which provides government guarantees to banks which provide loans to small-to-medium enterprises.

SJPP’s Automation Process Guarantee Scheme assists small-to-medium sized enterprises by providing guarantees to banks which loans them funds to automate, digitise and modernise in line with Industry 4.0.

“SJPP will guarantee bank loans, provided the borrower’s credit worthiness is clear and it will charge 1%”, said Azlan Mohd Agel, General Manager, Guarantee Schemes Management, Prokhas.

This option is available only to companies which are at least 51% Malaysian owned.

From one of the oldest

Established on 30 March, 1960, Malaysian Industrial Development Finance Bhd (MIDF) is one of oldest, if not the first Malaysian government-owned funders of industries since independence and it’s Soft Loan Scheme for Automation & Modernisation (SLSAM), launched in February 2017, provides up to 100% financing to manufacturing companies from small to large, which need funds for their Industry4WRD transformation through MITI.

“MIDF provides support to companies from startup to maturity and we charge small-to-medium enterprises 4% interest per annum on yearly rest and 5% per annum on yearly rest for large companies”, said Norazlan Zakaria, Head, Marketing, Marketing & Market Development Department at MIDF.

Financing for automation includes but is not limited to the purchase of new, used or reconditioned automation – related machinery or equipment. It also includes finance costs related to automation system design, fabrication. installation, commissioning and related training, as well as maintenance of the machinery and equipment for investment in automation and /or, purchase of software and computer peripherals related to the development of the automation system.

Private funding

FundedByMe Malaysia (FBM Crowdtech Sdn Bhd) is the only registered market operator in Malaysia that operates P2P (peer-to-peer) financing and Equity Crowdfunding, approved and regulated by the Securities Commission Malaysia.

It is a Malaysian joint venture with Sweden-based FundedByMe, co-founded by Daniel Daboczy and Arno Smit, which has invested over 61 million Euros in various companies and projects in all areas and industries.

FundedByMe Malaysia manages AlixCo, which aims to be the most trustworthy P2P financing marketplace for small-to-medium enterprises and investors in Malaysia.

“We have raised over RM300 million, mostly from investors in northern countries and we provide access to global investors, with over 50% of investments from European countries”, said Angelld Quah, Co-founder and Chief Operating Officer, FundedByMe Malaysia.

Any company can apply for P2P funding through AlixCo’s website at and it charges RM100 due diligence fees per company director plus between 2% and 8% hosting fees on the the total financial amount. Once accepted, AlixCo will post the company’s pitch on its website for investors to decide whether they want to invest.

“P2P financing is an alternative financing platform for companies which have been rejected by traditional financing institutions and we typically charge around 15% interest on loans worth RM500,000 and lower interest on shorter terms, and we also provide short-term loans of between 3 and 6 months”, said Angelld.

Homegrown crowd and equity funding

PitchIN says it has become the most successful rewards crowdfunding platform in South East Asia.

“When PitchIN Equity started in 2015, we raised RM3 million in our first year and altogether PitchIN has raised RM30 million in crowd funding and most companies are doing well”, said Kashminder Singh, Co-founder, PitchIN. “At the same time, anybody can invest and there will be a cooling off period”, he added.

The platform holds records for projects that raised the most funds and for the most number of backers for a single project and has successfully executed a slew of ground breaking crowdfunding projects such as the first ever Indie Festival in Penang, TAPAUfest, on-demand movies Movie GoGo project, the pitchIN-MaGIC Challenge, MDeC’s social project to assist the flood victims in East Malaysia, TeeSomethingNice, the tee-shirt project in celebration of Hari Malaysia and Merdeka 2014 and helped to secure a permanent place for Wok It, a Malaysian mobile kitchen that serves quick and customised meals to raise finances to build their kitchen and to set up a permanent home.

Industries listed for investment on PitchIN’s website at include aquaculture, education, finance, food & beverages, e-commerce, media, software, retail and technology.

More information is available in the 2018 PitchIN Equity Crowdfunding Report Report on its website, which can be downloaded by registered PitchIN users, though anyone can register and obtain more information.

A lively closing discussion

In the lively panel discussion before the conference ended, MNCC President, Prof. Zaki who chaired the session,  posed the question, “Industry 4.0 is a good ecosystem, which combines information with how to use it to transform industries. It’s an industrial game changer which is very important for our industry and nation to take Industry4WRD forward, so where do we determine where to start?”.

“Data analytics is a very important step to start from”, said Qlik’s Tan Chin Kuan.

Tan went on to point out that whilst all that would be great in a perfect world, however in reality, there still are many legacy systems, such as ERP, CRM, database, SCM and so forth still being used, and for data analytics to work, there needs to be a very sound strategy where everyone needs to be trained, including at university.

“From a recent survey by Qlik,, 21% of graduates who come out of university are data-literate,” said Tan. Also, there are people who question the need for them to invest in Industry 4.0 and Tan reckons that a shortage of data-literate people will defeat the purpose of embracing Industry 4.0.

“Companies that come to us wanting to go into Industry 4.0 need to show that they can realise a return-on-investment, so we can guide investments into their company”, said FundedByMe Malaysia’s Angelld.

Prof Zaki asked Angelld about women entrepreneurs, to which she replied, “According to my peers, any entrepreneur who comes to us is 100% successful. However, women entrepreneurs tend to undervalue themselves”.

“It’s not an issue with my company where we have more women than men. We have a few women engineers, whilst there are more men in IT and also there are more women in our universities”, said TXMR’s Tengku Mohd. Farid.

This writer asked from the floor that with one of the purposes of Industry 4.0 adoption being to reduce businesses reliance on human labour, would enough of production floor workers whose jobs are replaced by automation be able to upgrade their skills to find work at a higher level up the skills chain and even if all of them can, will there be enough higher-skilled jobs to absorb them all, even if their employer’s increased productivity enables the company to expand its operations.

After all, with industry captains such as Elon Musk and Marc Zuckerberg proposing a public policy whereby government pay all their citizens a universal basic income, it suggests that they know that advancements in information and communications technology will create fewer jobs than are eliminated, hence the need for a social safety net to avoid massive social unrest.

Also, this writer questioned the example of blacksmiths having to learn to repair motor vehicle tyres in order to remain in business, as not being comparable to the transation to advanced automation and Industry 4.0 due to the steep learning curve required of production floor operators, compared to the transition from shaping metal shoes to fit horses’ hooves to repairing or replacing motorcar tyres, where the former is a more skilled task than tha latter.

“The transition to full Internet 4.0 won’t happen overnight but will be gradual, and even with computer vision, someone still needs to take the picture”, said Mano Subramaniam, General Manager at Packaging Sales & Service (M) Sdn Bhd.

(Computer vision is an interdisciplinary field where computers are made to gain a high-level understanding from digital images or videos.)

Yes, Mano had told the conference that Malaysia’s transition to full Industry 4.0 could take about 15 years, by which time many of today’s older production floor workers would have either retired or have passed on. So the transition may not be as traumatic as it may seem at first sight.

“Industries 1.0, 2.0 and 3.0 replaced people who ended up being made redundant but in China, they moved to other industries”, said Sanwei Consultancy’s Ricky Sio. “Education is very important in Germany, they have many vocational schools, whilst China has made Industry 4.0 part of universities’ curricula, so universities will have to upgrade their courses”, Sio added.

“It depends on the industry. In Malaysia, we do not have enough labour, so we hire many foreign workers, whilst in Indonesia, they do not have enough highly-skilled people”, said Prof. Zaki.

“My company has five people. Let us rethink that we may not need another job anymore”, said Angelld. “Maybe instead of buying a house, we can go back to the kampung (village) and plant. Young people don’t want to do anything, and perhaps they are right”, she concluded.

Prof. Zaki called the conference to a close.

To read part 1 click here

Note: Charles F. Moreira is also a MNCC Council Member