Incentives for SMEs
27 October 2023
KOTA KINABALU: Among the incentives that can be utilised through the Ministry of Entrepreneur Development and Cooperatives (MEDAC) and its agencies are incentives for startup companies, including Bumiputera SME entrepreneurs venturing into High Growth High Value (HGHV) sectors such as the digital economy, aerospace technology, as well as electronics and electrical (E&E) industries.
Its Minister Datuk Ewon Benedick said there are also special programmes for halal SMEs under the integrated halal platform, offering access to special funds and capacity-building.
According to him, in the 2024 Budget, a significant amount of financing is allocated for Sabah and Sarawak, including an allocation of RM20 million to upgrade traditional markets or Tamu in both states next year.
This is among the proposals from small-scale entrepreneurs and traders during the engagement session a few months ago.
He said this in his speech during a briefing from the government agencies under MEDAC and SME Corp Malaysia (Sabah), SME Bank, Malaysian Cooperative Commission (SKM), Bank Rakyat, Pernas And Midf.
His text was read by Tan Sri Bernard Dompok the SME Corp Malaysia Executive Chairman.
The briefing was organised by the Kadazandusun Chamber of Commerce and Industry (KCCI) and Penampang Chinese Chamber of Business and Industry (PCCI).
Ewon said the findings of surveys conducted by MEDAC and SME Corp. Malaysia revealed that entrepreneurs are increasingly focused on adapting to new norms, particularly in the digital economy, sustainability, and business resilience.
However, high business costs and weak cash flow remain the main challenges for SMEs in improving their performance in the market.
“Therefore, these loan facilities and financing guarantees are timely to help entrepreneurs overcome operational gaps in their businesses in line with current developments,” he stated.
Out of a total of RM44 billion allocation announced recently. RM330 million is allocated under TEKUN to provide financing facilities for small traders, including batik entrepreneurs, craftspeople, Orang Asli, and Bumiputera entrepreneurs from Sabah and Sarawak.
RM30 million is specifically provided for financing Indian community businesses and RM720 million is set aside to encourage women and youth to enter the business field.
Additionally, RM100 million financing is allocated under Amanah Ikhtiar Malaysia (AIM), which aims to alleviate poverty among borrowers, especially single mothers and disadvantaged groups, through the provision of small business capital.
RM100 million in financing funds is provided to the cooperative movement through the Revolving Capital Fund of the Malaysian Cooperatives Commission (SKM), aimed at supporting more cooperative economic activities.
A large budget, no matter how big, will not benefit the intended target group if it does not reach them, he said adding that he wants the members of the ministry and agencies to act as facilitators.
“We should facilitate, not hinder, the financing applications submitted by entrepreneurs. For example, if there are five criteria and an applicant only meet three of them, we should guide them on how to meet the remaining criteria.
"These criteria are not meant to make it difficult for applicants, but to ensure that every allocated budget is used effectively, without any wastage. We need to act as facilitators to guide every entrepreneur in meeting the established criteria.”
He expressed his hope that all information is shared or disseminated to more entrepreneurs thus creating a society that fosters an entrepreneurial culture.