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PEMERKASA: Additional RM500m allocation for SME, micro business financing

As part of an effort to continuously support the recovery process, the Strategic Programme to Empower the People and Economy or PEMERKASA worth RM20 billion, along with a new fiscal injection by the government amounting to RM11 billion, was launched Wednesday.

Initiatives For Entrepreneurs, SMEs, And Businesses

Financing Aids For SMEs And Other Businesses

Here’s a list of financial aids that these businesses can look forward to:

The Geran Khas Prihatin aid has been renewed for the third time (GKP 3.0) to alleviate the financial burden faced by SMEs due to Covid-19. Previously offering a one-off assistance of RM3,000 & RM1,000 to eligible businesses, this latest version will provide RM1,000 instead for businesses register before 31 August 2020. Applications are set to begin from 1 April for SMEs that were not approved for the aid prior to this.

Bank Negara Malaysia (BNM) has also increased the Targeted Assistance and Rehabilitation Facility (TRRF) by another RM2 billion. With this, the total allocation for this facility – which is intended to support affected SMEs in the services sector – now stands at RM4 billion. Applications are open until 31 December 2021 or full utilisation of the available fund.

SME Automation and Digitalisation Facility (ADF) will receive an additional RM700 million to help Malaysian SMEs that wish to purchase equipment and assets required for their automation and digitisation aspirations.

SMART AUTOMATION GRANT (SAG) will receive a further injection of RM50 million to provided under the Malaysian Investment Development Authority (MIDA)’s Smart Automation Grant, to encourage more SMEs and mid-tier companies to leverage technology to improve their operational efficiency.

RM50 million will also be allocated to the Industry4WRD programme under the Ministry of International Trade and Industry. It was launched back in 2018 to drive the digital transformation of the manufacturing and other related services sector in Malaysia.

Malaysian Industrial Development Finance (MIDF) will allocate RM200 million as financial aid for companies that wish to upgrade themselves via automation, digitisation, and the utilisation of green technology. The interest rate will be set at 3% instead of the original 5% for a period of 12 months, starting from 1 April 2021.

SME Bank also has a financing fund worth RM200 million to help companies purchase machines so that they can automate their processes and reduce dependency on foreign workers. A grant incentive of up to 20% on the value of the machines will be given.

The government will provide an extra RM500 million for the Microcredit facility aimed at assisting SMEs, in addition to the original RM1 billion that was already earmarked via Budget 2021. This fund will be disbursed through several programmes under Bank Simpanan Nasional (BSN), TEKUN Nasional, MARA, and SME Corp. Specifically:

  • Bank Simpanan Nasional - RM300 million will be channelled to assist SMEs via loans with a funding limit of RM50,000, at a reduced interest rate of 3% instead of the previous 3.5%. The loan tenure will last for five years, and instalment payments will only start after the sixth month.

  • Tekun Nasional - TEKUN Mobilepreneur programme will be expanded to include the financing for new purchases or repairs of motorcycles with a limit of up to RM10,000. A 100% exemption of excise duties on locally assembled 150cc and below motorcycles will be given, starting April 1 until Dec 31, 2021. TEKUN will also launch the TEKUN POS-preneur programme, whereby applicants will be able to generate income through delivery contracts. Financing assistance of up to RM20,000 will be provided for the purpose of vehicle repairs, and up to RM50,000 for purchases of vans or lorries.

  • MARA will be disbursed RM50 million Micro Prihatin Business Financing Scheme, targeted at assisting 1,000 bumiputera micro-SMEs. The maximum amount that can be borrowed is set at RM50,000 with an interest rate of 3%.

  • SME Corp - Local SMEs can borrow up to RM250,000 at an interest rate of 3%. A total of RM50 million has been earmarked for this assistance.

With this, we hope that you now have an idea of some key initiatives from the PEMERKASA stimulus package that SMEs, MSMEs and other businesses can tap into! With the country now already in the fifth stage of a six-phase strategy to improve the country’s economy (Revitalise), the government hopes not only jumpstart the economy, but also transform it into something better.


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