A proposal that could change how creative and technology businesses raise money has been put forward. Bernama reports, under the Ministry of Communications, that Malaysia is calling for intellectual property to be recognised as a bankable asset. I have only seen the headline, so I do not know the forum where the call was made or the specific mechanisms proposed.
Intellectual property, or IP, includes copyrights, patents, trademarks and designs. A bankable asset is one that a bank or financier will accept as security or value when lending money. At present, many lenders prefer tangible assets such as property or equipment, which makes it difficult for creative companies and start-ups, whose main assets are ideas, content and brands, to obtain financing.
Recognising IP as bankable would require ways to value it reliably, register and protect it and enforce rights if a loan is not repaid. Some countries have experimented with IP-backed financing, but valuation remains difficult, since the worth of a film catalogue or a software patent can change rapidly. Legal frameworks, credit guarantees and trusted valuation methods would be important.
The call fits with the government's emphasis on the creative industry and on moving up the value chain, and with Malaysia's discussions with Indonesia, Singapore and Cambodia on creative cooperation. For creators and small companies, the key step is to protect their work through registration and clear contracts. If financing options develop, those with well-documented IP will be better placed. Watch for any proposals from the intellectual property agency, banks and the central bank, and for pilot schemes that test how IP can be used in lending.
