KUALA LUMPUR, Dec 13 — Malaysia’s micro, small and medium enterprises (MSME) were among the sectors most badly hit by the Covid-19 pandemic.
Between lockdowns and various movement control orders, MSMEs struggled to survive with their biggest problems being cash flow and the repayment of loans.
Minister of Entrepreneur Development and Cooperatives, Tan Sri Noh Omar told the Dewan Rakyat in September that a total of 37,415 businesses had to cease operations after the third round of the movement control order (MCO 3.0) was enforced in May this year.
With the market segment struggling to regain its footing, Putrajaya has implemented several initiatives to assist MSMEs once again play their role in the country’s economic recovery.
Microcredit
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said that Tabung Ekonomi Kumpulan Usaha Niaga (Tekun) will be introducing a financing scheme worth RM425 million for microenterprises and the informal sector which will offer financing at zero per cent interest for a maximum loan amount of up to RM10,000, with a moratorium period of up to 12 months.
He said that under this scheme, priority will be given to micro traders in the informal sector.
The Ministry of Finance (MoF) will also be expanding its microcredit scheme with AgroBank and Bank Simpanan Nasional (BSN), with the former pumping in RM250 million and the latter putting in RM800 million for financial aid for MSMEs, with the banks offering microcredit loans of up to RM75,000 at zero per cent interest for the first six months of the loan tenure, with a six-month moratorium.
Bank Rakyat will also be adding RM50 million worth of financial aid to bring the sector back up, with Bank Negara Malaysia (BNM) also investing RM200 million into the establishment of a microenterprise facility.
Equity or alternative financing
Tengku Zafrul said that an additional RM600 million will be allocated to support equity and quasi-equity investment schemes which will be led by SME Bank in collaboration with TERAJU and BSN.
He said that the Malaysia Development Bank Berhad (BPMB) will also allocate RM500 million for its Rehabilitation and Support through Equity scheme (or RESET) in addition to BNM’s Business Recapitalisation Fund worth RM1 billion.
He added that RM80 million under the Securities Commission (SC)-administered Malaysia Co-Investment Fund (MyCIF) has also been added to spur MSME financing via Equity Crowdfunding (ECF) and Peer-To-Peer Lending (P2P).
Easy loans for Small and Medium Enterprises
Tengku Zafrul said that RM14.2 billion worth of funds will be readily available in 2022 for SMEs through SME Bank, Perbadanan Usahawan Nasional Bhd (PUNB), BPMB, AgroBank, Malaysian Industrial Development Finance Berhad (MIDF), Majlis Amanah Rakyat (MARA) as well as BNM.
He added that under BNM’s Funds for SMEs, the Targeted Relief and Recovery Facility (TRRF) has also been upsized by RM2 billion, bringing the total available funds under various SME facilities administered by BNM to RM11.2 billion.
Business financing guarantee
Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will further assist SMEs recover with an additional guarantee limit of RM22 billion to provide guarantees for loans that are being rescheduled and restructured for companies in need.
The minister added that RM2 billion is being dedicated to Bumiputera business.
He said that this will help affected businesses secure new financing that under normal circumstances would have been difficult to obtain.
