Much-needed injection for business growth

and the number of daily infections go down.

“In the meantime, the government could focus on specific business problems faced by SMEs and come up with solutions such as a rental relief fund, or asking local governments to provide moratoriums on assessment tax.”

Persatuan Profesional Melayu Malaysia secretary Fauziah Husain said the assistance was crucial to facilitate the livelihood of micro-enterprises and SMEs.

Fauziah, who had projectmanaged an initiative to train more than 150,000 microentrepreneurs for three years, said it was imperative that the government addressed the needs of SMEs as they were the backbone for job creation.

She pointed out that over 973,000 SMEs in the country contributed more than 30 per cent to the gross domestic product, adding that it would create three million jobs if the SMEs employed three people each.

While continued efforts by the government for SMEs through several rounds of microfinancing were lauded, she said additional assistance in the form of market access was also needed.

“For example, all businesses would require digital adoption to survive in this new normal.

“An aggressive and structured facilitation towards this goal would see acceleration in efforts to digitalise.”

Fauziah also suggested a streamlined digital platform, providing SMEs easy access to apply for financing, where the government could have total visibility, particularly on deserving entrepreneurs who have been shortchanged.

A centralised procurement system would also aid microenterprises and SMEs, she added, to aggregate demand for products and services provided by them.

“Through this platform, they can be developed to serve bigger markets and experience consistent growth,” said Fauziah.

Fauziah Husain

She also urged the government to set up a private-led council made up of industry experts, empowering them as anchor clusters to help steer consistent and rapid growth of these businesses.

Meanwhile, social activist Dr Jeyakumar Devaraj praised the government for recognising that the free market could not always function properly.

He said demand was now depressed as many families have suffered a loss in income because of the MCOs.

“(With the facility), not only will these micro-businesses have some capital to restart operations, their expenditure will expand the market for other small businesses.

“This leads to a multiplier effect which will boost this entire sector.”

Jeyakumar said it was vital that the government continued with such initiatives until the economy recovered, adding that SME operators were in trouble as they were unable to run their businesses with demands for their goods or services collapsing because of the lockdowns.

“In the spirit of ‘kita bantu kita’ (helping each other), we need to extend assistance to all groups who require help. People will stand on their own feet once the economy recovers,” he said.

On March 17, Prime Minister Tan

Sri Muhyiddin Yassin announced that the government had agreed to allocate RM500 million in microcredit financing under Pemerkasa, which would be distributed through programmes under Bank Simpanan Nasional (BSN), the National Entrepreneur Group Economic Fund (Tekun), Majlis Amanah Rakyat (Mara) and SME Corp.

The amount was an additional allocation to the RM1 billion in the microcredit financing fund introduced during the tabling of the 2021 Budget in Parliament last year.

BSN would allocate a fund of RM300 million, with the maximum financing amount of RM50,000 and interest rate of three per cent, reduced from 3.5 per cent.

SME Corp would also provide RM50 million to help local SMEs, where eligible applicants can apply loans of up to RM250,000 at an interest rate from as low as three per cent.

He had also announced that Tekun would allocate RM60 million under the Informal Financing Scheme, with a financing limit of up to RM5,000 to help spur the growth of the informal sector, while Mara would implement the Micro Prihatin Business Financing Scheme to assist 1,000 Bumiputera micro-entrepreneurs.

Dr Jeyakumar Devaraj

RM5,000

• Loans of up to at a 3 per cent interest rate

• Loans of up to at a 3 per cent interest rate

Microcredit financing fund distributed through programmes under

• Funding limit of RM50,000

• Interest rate reduction 3.5 per cent to 3.0 per cent