Semarak Niaga Keluarga Malaysia Programme set to benefit Malaysia's SMEs and micro-SMEs

Enterprises can look at financial loans with zero interest rates from institutions like SME Bank, or business financing guarantees to obtain new financing which was previously difficult for them to obtain.

Worth a total of RM40bn, Malaysia's latest economic support initiative, Semarak Niaga Keluarga Malaysia Programme, will increase access to financing to the business sector (i.e. SMEs, or PKS), especially for micro-SMEs (PMKS) entrepreneurs, and the informal sector, Prime Minister Ismail Sabri said during the launch of the initiative on 19 February 2022 (Saturday). The programme includes direct loans, financing guarantees, and equity injections for the benefit of every group of entrepreneurs.

The move, the Prime Minister reiterated, indicates the Government's commitment to help businesses and entrepreneurs tide through the effects of the pandemic as, he believes, the contribution and role of the enterprises are "very important in reviving the country's economy".

With that in mind, PM Ismail shared key details of Semarak Niaga Keluarga Malaysia Programme, summarised below.

#1 Loans with zero interest rates

For micro and small enterprises, the Prime Minister said that the Government "is sensitive to the need for access to low interest rate financing". As such, entrepreneurs can look at the TEKUN Nasional Micro Sector Business Rehabilitation Financing Scheme (CBRM) for assistance - it offers financial loans of up to RM10,000 at zero interest rate with priority given to informal sector traders. "The size of the fund for this programme alone is RM200mn," PM Ismail shared.

For more mature enterprises, financial institutions, such as SME Bank, will offer loans of up to RM10mn under the BS Promotion Fund 2.0 scheme, and RM1mn under the Young Entrepreneur Financing Programme 2.0 (or YEF 2.0). "Collectively, the fund size for these two schemes is RM300mn," the Prime Minister added.

Companies that are, on the other hand, "viable but have constraints on obtaining new funds", PM Ismail shared that the Government and financial institutions have formulated a new, and more flexible form of financing to expand their ability to revitalise their business.

One of them is through equity crowd funding, and peer-to peer financing which will be supported by an allocation of RM80mn in matching grants under the Malaysia Co-investment Fund. On top of that, there will be investments from Bank Pembangunan Malaysia Berhad (BPMB) worth up to RM100mn. Another, which is mainly to assist companies facing high indebtedness or gearing problems, is funding methods in excess of RM2.1bn through equity and quasi-equity investments. This latter method is spearheaded by SME Bank with funds worth RM600mn.

"BPMB will also offer a Rehabilitation and Support Through Equity scheme (RESET), with a fund size of RM500mn," PM Ismail said. "Bank Negara Malaysia (BNM) will also provide a Business Recapitalisation Facility worth RM1bn for the same purpose".

With that, a total of RM13bn funds is available for SMEs to tap on for business continuity during the pandemic season.

"For the continued availability of funds, BNM's special funds, especially the Targeted Relief and Recovery Facility and Agrofood Facility have been increased collectively by RM2.5bn to RM10bn. The total availability of various BNM SME funds is currently RM10bn", the Prime Minister added.

As for enterprises that are part of agro-food sector, the Prime Minister said that they can, under Agrobank's micro credit scheme, apply to receive loans of up to RM75,000 at zero interest rate for the first six months, with a moratorium facility for up to six months.

#2 Business financing guarantee

Beyond financial loans, the Semarak Niaga Keluarga Malaysia Programme also includes business financing guarantee.

A scheme, called the Business Financing Guarantee Company (SJPP), will be enhanced by providing guarantees for scheduled, and restructured financing with an additional guarantee limit of RM17bn. This will, according to PM Ismail, help companies obtain new financing which was previously difficult to do.

#3 12MP

Diving into the 12^th Malaysia Plan (12MP), PM Ismail shared that it will also include "the transformation of PMKS" to "increase the competitiveness, and contribution of this segment to the country's economic development".

On that note, the transformation will include:

• The implementation of a MSMEs digitalisation roadmap;
• The shift of PMKS focus from the local focused market to the world market;
• The implementation of second chance intervention programmes for certain traders; and
• The empowerment of the cooperative ecosystem in generating a new generation of entrepreneurs.

"This effort is also in line with the aspirations of the National Digital Network (JENDELA), and the Malaysian Digital Economy Blueprint initiative (MyDigital), which will drive Malaysia as a leader in an efficient, and proactive digital economy sector, further shaping a high-income nation," PM Ismail said.

"God willing, these initiatives will increase the contribution of PMKS to the country's GDP to 45%, the contribution to the country's exports to 25%, and generate two 'unicorns' of Malaysia by 2025."

Beyond 12MP, the Prime Minister added that the Government will also utilise the Jamin Kerja Keluarga Malaysia (JaminKerja/Job Guarantee Programme - Employment Incentives) initiative to boost employment opportunities.

"Next, the target of 600,000 job opportunities will be achieved through the contribution of job creation in the PMKS sector," he said.

Also read: Malaysia's Budget 2022: Key takeaways for employers and HR to note

Image / PM Ismail's Facebook

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