Malaysian Industrial Development Finance Berhad (MIDF) has approved the country’s first financing facility under the WIPO–MIDF Intellectual Property (IP)-Backed Financing Pilot Programme, marking a significant breakthrough for Malaysia’s innovation and SME financing ecosystem.
The milestone introduces a new financing approach that recognises intellectual property (IP) assets as viable collateral, opening doors for innovation-driven and asset-light SMEs that often struggle to secure funding through conventional financing channels.
The initiative stems from a Memorandum of Understanding (MoU) signed between MIDF and the World Intellectual Property Organization (WIPO) on 24 September 2025.
Through the programme, both parties aim to develop structured frameworks that integrate intangible assets into modern credit assessments and financing models.
A New Financing Pathway for Innovation-Driven SMEs
The inaugural recipient, a Malaysian SME, secured financing by leveraging its intellectual property portfolio as part of the credit evaluation and security structure. The approval process applied specialised methodologies for IP identification, valuation, and commercial risk assessment developed specifically under the pilot programme.
Importantly, the programme targets businesses that rely heavily on innovation, technology, branding, and intangible assets rather than physical collateral. As a result, the initiative could reshape how financial institutions support high-growth SMEs in the future.
Moreover, SME Corporation Malaysia (SME Corp) strengthened the initiative by allocating a dedicated RM10 million fund to support IP-backed financing applications.
To ensure robust evaluation standards, independent specialists Adastra Intellectual Property Sdn Bhd and Inngot Ltd (UK) provided technical expertise in valuation, commercial risk analysis, and knowledge transfer. At the same time, the Intellectual Property Corporation of Malaysia (MyIPO) helped facilitate the legal framework required for registering and enforcing security interests tied to IP assets.
Driving Malaysia’s Innovation Economy
MIDF Chief Executive Officer Azizi Mustafa described the approval as a major turning point for Malaysia’s financial landscape.
“This milestone marks a turning point in our financial landscape, proving that intellectual property is a viable and powerful form of collateral. By
unlocking the value of intangible assets, MIDF is empowering innovation-driven SMEs to translate their ingenuity into scalable growth,” he said.
Meanwhile, Marco Aleman, Assistant Director General of WIPO, highlighted the importance of collaborative efforts in advancing IP financing globally.
With additional applications currently under review, the first approval now serves as a blueprint for future innovation-based financing in Malaysia. Furthermore, the initiative supports broader national efforts to strengthen entrepreneurship, technology development, and SME competitiveness in the digital economy.
