The Inclusion [Social Ratings] team visited Malaysia in June to meet with two of the key players that are steadily shaping the new social economy ecosystem in the country and the region: the Agensi Inovasi Malaysia and the Malaysian Global Innovation and Creativity Centre (MaGIC).
Agensi Inovasi Malaysia: promoting social finance
Malaysia is progressively shaping a new social economy ecosystem involving the government and private and social sectors. In March 2017, as part of this effort, the Malaysian Government launched a Social Outcome Fund (SOF), which will make available 3 million Malaysian Ringgit (approximately 700,000 USD) for national social intervention projects. The Fund, managed by the Agensi Inovasi Malaysia (AIM), aims to encourage corporations and foundations to invest in social impact beyond mere corporate social responsibility. Investments made by corporate investors may be entitled to a reimbursement from the Social Outcome Fund if the investment results in 1.5 times or more of value, in terms of cost savings, for the government arising from that intervention (1).
During the meeting with the Executive Vice President of AIM, Mr Eddie Razak, and his team, Inclusion [SR] shared its knowledge about this innovative form of financing. Both parties discussed the importance of independent third-party ratings for this type of “pay for success bonds” as a tool for investors to assess the potential social impact of the underlying sponsored program and to differentiate between the risks inherent in achieving a successful social outcome while balancing the financial return to investors.
Malaysian Global Innovation and Creativity Centre (MaGIC) – promoting Social Entrepreneurship
As the name of this organisation suggests, something magic and special is starting to happen in Malaysia in terms of social entrepreneurship. The MaGIC Social Entrepreneurship team has an ambitious plan known as the “Malaysian Social Enterprise Blueprint” that aims to unleash the potential of social entrepreneurship by promoting the sector‘s growth from 200 social enterprises in 2016 to 1,000 by 2018 (1).
With this objective, two programmes – known as the Impact Driven Enterprise Acreditation (IDEA) and the Social Procurement Incentive – are being launched by Magic in July 2017. The first aims to identify and accredit the effectiveness of social enterprises in Malaysia and the second aims to provide a platform for supply and demand of social procurement for the enterprises enrolled in the programme. Inclusion [Social Ratings] will be following these programmes closely and will provide updates as they evolve. Stay tuned.
Ana de Miguel
Director – Europe
Inclusion [Social Ratings]
[1] Adam Pillsbury “Malaysia Launhes Social Outcome Fund to grow its social economy” published in Pioneers Post on May 2017 by British Council (https://www.pioneerspost.com/news-views/20170509/malaysia-launches-social-outcome-fund-grow-its-social-economy)
