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Monday, 2 November 2026

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Malaysia Is Testing Loans Against Intellectual Property. Banks Still Need a Way to Value It

Malaysia's intellectual property-backed financing initiative could help innovative SMEs access capital without conventional physical collateral. However, uncertain valuations, limited secondary markets and recovery risks remain major obstacles to widespread commercial-bank adoption.

By Katherine (Kay)3 min read

Kuala Lumpur, 2 November 2026 – Malaysia is exploring how intellectual property can become a practical source of business financing, potentially opening new funding opportunities for innovative companies that lack conventional collateral.

At the launch of the IP-Backed Financing Pilot Project Final Report on 2 November, Deputy Investment, Trade and Industry Minister Sim Tze Tzin encouraged financial institutions to consider lending against intangible assets.

The initiative, involving Malaysian Industrial Development Finance Berhad (MIDF) and the World Intellectual Property Organization, has already achieved an initial financing approval.

However, the pilot also highlights a fundamental challenge. Recognising intellectual property as valuable does not necessarily make it suitable collateral for a commercial loan.

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Author

  • Katherine (Kay)

    Kay like to explores the intersection of money, power, and the curious humans behind them. With a flair for storytelling and a soft spot for market drama, she brings a fresh and sharp voice to Southeast Asia’s business scene.
    Her work blends analysis with narrative, turning headlines into human stories that cut through the noise. Whether unpacking boardroom maneuvers, policy shifts, or the personalities shaping regional markets, Kay offers readers a perspective that is both insightful and relatable — always with a touch of wit.