Government grants should be seen as a stepping stone, not free money

KUALA LUMPUR: Small and medium entrepreneurs need to change their mindset on government grants received, said SME Bank chief executive officer, Aria Putera Ismail.

He said they should view the grants as not free money, but as a stepping stone towards building a stable business.

“A lot of small medium enterprises (SMEs) start-ups hope to secure grants from the government, but it is sad that some of them, do not value the grants given, to the point they do not mind if they fail.

“We need to change this mentality. They need to understand that the grants are not free money and many other start-ups are hoping to secure them.

“For example, we want to ensure government grants in the budget, once given to the entrepreneurs, will be repaid and used by another entrepreneur or to create certain profits or make dividend payments,” he told Bernama.

Aria Putera stressed that if the grants continued to be misappropriated, it could harm Malaysia’s economy.

“The government needs a clear method for approving grants, so that the start-ups would appreciate the assistance better, which will lead in turn to better performance,” he said.

Meanwhile, Aria hopes the government will continue to present grants to SMEs for them to contribute to Malaysia’s economy growth in the upcoming Budget 2019 to be tabled by Finance Minister Lim Guan Eng on Friday.

“If the government can allocate not less than before, and the best is more than previously,” he said.

Last year, SMEs contributed RM435.1 billion to Malaysia’s economy making the segment’s contribution to Malaysia’s gross domestic product (GDP) up to 37.1 per cent, compared with 36.6 per cent in 2016.

The government’s target is for SME contribution to the GDP to reach 41 per cent by 2020, with contribution to the country’s exports to hit 23 per cent and SME employment to reach 65 per cent of overall employment.

In the Budget 2018, the government allocated RM200 million to SMEs for training programmes, grants and soft loans under the SME Corporation.