Why there’s a post-Covid allure to Malaysian social enterprises

“It is not easy for impact investors coming from outside, unless they are able to come up with a unique bottom-up approach,” he adds.

But unlike other Southeast Asian nations, Malaysia has received less attention from impact investors. Out of US$904 million deployed by private impact investors across the region between 2007 and 2017, Indonesia, the Philippines, and Vietnam accounted for over 30% (over US$281 million) of the money invested.

Southeast Asia is at the confluence of South and East Asia from a socio-economic perspective and it has the potential to tap capital from traditional Western capital pools and also emerging East Asian capital.


As the third largest economy in Southeast Asia by GDP, Malaysia is somewhat overlooked by investors who generally assume that more developed countries lack problems to be solved. Social enterprises in the country are still funded mainly through charity (32%), foundation work (26%), and government grants (25%), according to the British Council report.

The truth is, Malaysia still has unique problems of its own to be solved through social enterprises, says Yew Jian Li, managing director of Malaysia-based impact investment firm Citrine Capital.

For instance, stunting remains a problem in the country—one in five Malaysian children under the age of five is stunted, according to the 2016 National Health and Morbidity Survey (NHMS). Other local development challenges—such as increased greenhouse emissions, heavy reliance on foreign workers, and urban poverty—are supply-driven opportunities for social enterprises.

The accreditation programme by the Malaysian government is no silver bullet, either.

The nature of the accreditation programme makes it more suitable for relatively mature organisations that are profitable, since companies are required to be financially sustainable to be accredited. This makes it tougher for early-stage companies to get accredited and leverage on the benefits offered.

SE Basic or Social Enterprise Basic—the first entry point towards accreditation—allows MaGIC to identify potential social enterprises for accreditation from a wide base of applicants.

Dzuleira of MaGIC adds that SE Basic can reach out to the agency for capacity building opportunities to help them enhance their business model to be accreditation-ready.

“I suppose the perspective here is that MaGIC and the government want to make sure that the social enterprises can fulfill market demands – because if your business is at a loss or not generating revenue, it raises questions or doubts about your business model,” says Biji-Biji’s Pal Singh.

Write a better future

While public perception towards social enterprises has improved, that alone won’t drive investments. Social entrepreneurs still need to make sure they’re investment-ready and market themselves well.

“Whether it’s a social enterprise or an e-commerce business, it needs to be sustainable. A business needs to have capital to drive growth and eventually turn profitable,” says Genesis Alternative’s Loh.

A profitable case study

Singapore-based food waste processing startup UglyGood that harvests fruit waste, extracts components from fruit pulps and peels then turns the raw materials into essential oils, animal feed, and cleaning solutions, has turned a profit since it started business in 2017. It spun off its cleaning solutions called SimplyGood in March.