Call for RM200 mln fund to help SMEs
KOTA KINABALU: Small and Medium Enterprises Association of Sabah (SME Sabah) president, Foo Ngee Kee has called on the government to consider se ing up a SME Aids Fund (SMEAF) to help SMEs who were unable to obtain any of the assistance provided by federal schemes.
Foo said the SMEAF, which he proposed to be allocated RM200 million, could be in the form of capital injection scheme that had been pioneered during the 1997 Asian financial crisis code named as Dana Modal.
He said the benefits of such capital injections would help hotel owners to fund their operations without the burden of loan and interest repayments later.
“The government can secure their cash injections by way of equity in these funded companies or a proportionate share in their main asset property a er the chargees’ interest, if the properties have already been charged,” he said when asked about the wish list for the state budget 2021 which will be tabled on December 4.
Foo lamented that budget hotels and some bigger hotels suffering the impact of the Covid-19 pandemic have lost more than 90 percent of their businesses due to the closing of international borders to curb the spread of the virus.
“These hotels, especially budget hotels, cannot continue to fund their hotels for long.
“Many of them will have to close, not out of choice but due to lack of cash flows and profitability.”
No doubt the provision of wage subsidy will help reduce the operating expenses and offering loans will help pay for the expenses, he added.
Foo said a majority of SMEs would undoubtedly fail with the prolonged closing of borders and ba le to put Covid-19 under control.
“While there is still li le time le for some of these struggling SMEs, SMEAF should, if approved, be implemented quickly with a special task force to be set up that is chaired by the Chief Minister and State Secretary as the deputy chairman.
“The task force should also include permanent secretaries of relevant ministries together with the private sectors and relevant non-governmental organizations (NGOs) to have frequent round table discussions to map out the procedures and to identify the sectors and businesses that Sabah Government deem important to rescue.”
In addition, Foo proposed se ing up a RM30 million fund to purchase big and small mobile trucks and offer a concession rental to eligible micro SMEs to sell local products made by the local SME producers and the informal economy.
He said the mobile trucks would allow retrenched workers or micro SME owners who failed in their business a chance to earn livelihood by performing simple sales.
He said housewives or parttimers too can take part in either supplying food items or renting the trucks part-time under a shared basis with other part-timers to gain supplemental income for the family.
He added that SMEs that have been nurtured by the Department of Industrial Development and Research (DIDR) of the Ministry of Industrial Development could sell their local packed food products like kerepek, anchovies and peanuts, honey through these truck, thereby boosting their sales which have also been hit by weak demands due to movement restrictions.
He said the sales mode of the mobile trucks would be required to comply with the standard operating procedures (SOPs) to prevent the spread of Covid-19.
“It is in fact a shop and grab delivery combination and their sales price can be lowered that helps in reducing the costs of living.
“The lower cost of living will greatly benefit B40 group and also the general public, whilst address a longstanding problem of the highest costs of living in Sabah amongst all states with or without cabotage policy.” he said.
Foo hoped that the Sabah Government could also emulate its federal counterpart in holding budget dialogues with relevant chambers of commerce and associations in preparation for the state budget.