AIBIM wants govt to channel incentives for SMEs via Islamic Banks

KUALA LUMPUR: The Association of Islamic Banking Institutions Malaysia (AIBIM) hopes the government will use Islamic banks as the platform for its incentives allocation especially those aimed at boosting the Small and Medium Enterprises (SME).

AIBIM President, Datuk Mohd Redza Shah Abdul Wahid, believed financing to the SMEs would be one of the main points to be addressed in the upcoming 2018 Budget.

“Under the budget two years ago, the government provided incentive allocations to Islamic banks, but at the moment there’s none as all (allocations) have been channelled to the conventional banks.

“Now we want incentives through Islamic banks to be reintroduced. This can help encourage the development of Islamic banks, (by encouraging people to use Islamic banking products,” Mohd Redza, who is also Bank Muamalat Malaysia Bhd chief executive officer, told Bernama recently.

He expected that some RM300 million to RM400 million worth of financing would be channelled to the SMEs under Budget 2018, with the government providing up to two per cent subsidy.

“That (subsidy) will lower the financing cost to SMEs. It will help lower thier cost of doing business in terms of reducing the financing cost obligation in the future,” he explained.

The 2018 Budget will be tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament this Friday. — Bernama