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Malaysian Industrial Development Finance Berhad
Malaysian Industrial Development Finance Berhad (or its acronym MIDF) was established on 30 March 1960 as Malaysia's first development financial institution to support the industrialisation of the country post independence.

History​
The beginnings of MIDF can be found in a 750-page report, ‘The Economic Development of Malaya’, issued by the International Bank for Reconstruction and Development (World Bank) in 1955. The report was prepared at the request of the Governments of the Federation of Malaya, Crown Colony of Singapore and the United Kingdom for the World Bank to undertake a mission to Malaya to consider how the economic resources of the soon-to-be independent nation could be best used for its development. The mission, comprising 13 specialists in agriculture, public finance, mineral resources, transport and communications, industry, power and social services, as well as general economists, were in Malaya from January to May 1954.

In short, they found Malaya to be relatively prosperous, although its economy was heavily dependent on the exports of tin and rubber, which accounted for 80% of the country's total exports and 50% of the government's revenue. The overdependence puts Malaya vulnerable towards any volatility in the world market. This was compounded by the dimming prospects of these commodities, with the advent of synthetic rubber, and in the case of tin, technological economies in its utilisation. The solution to this was to broaden the economic base. The World Bank mission recommended, among others, that the secondary industries sector be developed to diversify the economy from its reliance on primary commodities, and create productive and well-paying jobs in Malaya, where salaries were already on the high side. It also recommended that the industrial sector be driven by private enterprise and capital, and move away from the very small-scale family enterprise model towards a more modern form of joint-equity organisation.

However, these small enterprises could only expand by reinvesting their earnings or sourcing credit through personal contacts or from money lenders, which imposed a very high interest rate. The commercial banks operating in Malaya were mostly British-owned, and as banking in Malaya had developed to finance the export-import trade, they largely focused on short-term lending in the form of overdrafts. In most cases, the average domestic entrepreneur did not have access to banks and did not have the collateral for a loan. Formal arrangements for medium- and long-term credit barely existed. As such, the World Bank mission recommended that a specialised industrial credit institution be set up for Malaya and Singapore, along with a central bank to manage monetary policy and an industrial research institution to formulate industrial policy.

On 30 March 1960, the Malayan Industrial Development Finance Limited was incorporated under the Malayan Companies Ordinances 1946, and became Malaya’s first development finance institution. In 1964, the name was changed to Malaysian Industrial Development Finance Berhad (MIDF). MIDF had a good start, with the public, insurance companies, banks and commercial firms oversubscribing to its capital by $400,000. Its authorised capital was $15 million, with $5.25 million initially paid up. Its first shareholders were:


 * $2.5 million from Federation Government
 * $2.5 million from Malaya Developments Ltd. (on behalf of the Colonial Development Corporation)
 * $5 million from five exchange banks – Chartered Bank, Hong Kong and Shanghai Banking Corporation, Mercantile Bank Ltd., Overseas Chinese Banking Corporation Ltd., and Eastern Bank Ltd.
 * $1.25 million from Members of the British Insurance Association operating in Malaya
 * $1.25 million from other insurance companies in Malaya
 * $2.5 million from other foreign banks, trading companies, plantation companies and individuals

The Early Years
The early years were shaky as small and medium enterprises (SMEs) found MIDF's lending requirements difficult to meet, which resulted in very small number of successful applications. This in turn aggrieved the Malayan government, which took issue with MIDF's conservative approach. The breaking point was when MIDF approved a loan of $7 million to Dunlop Malayan Industries Limited in 1961 to set up a tyre factory. The loan, which took up almost half of MIDF’s share capital of $15 million, was seen as in opposition to the government's initial aim for MIDF to support local industries, since Dunlop was a foreign-owned company.

Thus, when MIDF applied for a loan from the World Bank in 1962, the government declined to provide a guarantee and instead requested the World Bank to undertake an appraisal of MIDF. The World Bank report in 1963 offered recommendations for the restructuring of MIDF. As a result, MIDF increased its Malayan shareholding, and its resources were expanded through the World Bank loan of US$8 million guaranteed by the government which also extended a loan of $37.5 million.

Starting afresh, MIDF’s lending business grew rapidly. While focusing mainly on small enterprises, MIDF also invested in large pioneer industries such as steel mills and cement plants in its first decade. Some of these names remain with us today – Malayawata, Volvo, Malayan Flour Mill, Royal Selangor Pewter and KL Hilton Hotel.

The New Economic Policy
Taking on a bigger role in national development, MIDF became a partner in implementing the New Economic Policy aimed at diversifying ethnic participation in the economy following the communal clashes of 1969. It made its first loan to a Bumiputera enterprise – Sharikat Mohamed Ismail Printing Ink – in November 1969, and set up a Bumiputera Department in 1974. From under 1% of its loans in 1969, MIDF’s Bumiputera loans increased to 30% of its loans by the mid-1970s.

Having loan policies that closely tracked national priorities, MIDF switched its focus in the 1970s from import substitution industries to export-driven, labour intensive industries in line with the national focus on addressing the nation’s growing unemployment.

To further support new industries, MIDF offered low-cost factories through its subsidiary, Malaysian Industrial Estates Limited (MIEL), established in 1964. In 1971, MIDF expanded into consultancy services through MIDF Industrial Consultants (MIDFIC), and expanded further by partnering in the establishment of the nation’s first merchant bank, Malaysian International Merchant Bankers Berhad (MIMB).

In the 1980s, MIDF broadened its lending to the wider industrialisation activities such as infrastructure and energy, as well as the services sector, in line with the national aim of broadening the industrial base. It took on a new role of managing the government’s soft loan schemes for manufacturing.

Mergers & Acquisitions
The financial landscape had, however, grown crowded by this time. While MIDF was established to fill a financing gap in the 1960s and 1970s, commercial banks also begun offering manufacturing loans on competitive terms by the 1980s. To remain competitive, MIDF sought to expand its range of services through the acquisition of a commercial bank, Oriental Bank Berhad, in 1990.

MIDF was listed on the Kuala Lumpur Stock Exchange on 7 December 1992, becoming the first development finance institution in Malaysia to be public listed. It set out on a path of rapid growth but the Asian financial crisis, which engulfed the region in 1997/98, triggered hefty losses in Oriental Bank. In the aftermath of the crisis, Oriental Bank and MIMB were sold in 2000 to EON Bank (which later became part of Hong Leong Bank).