ENTREPRENEURSHIP can play an important role in alleviating poverty in the country, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
“If a person is not able to pursue tertiary education, he will not be able to obtain the necessary degree to secure a good salary in a traditional job.
“However, if he started a food or clothing business, he could earn a decent income while building wealth through business equity,” he said.
Tengku Zafrul said entrepreneurship benefitted not only the entrepreneurs but also their community, adding that approximately 70% of jobs in the country were created by micro, small and medium enterprises (MSMEs).
“And it is for this reason that our policies in Budget 2022 are aimed at creating the right ecosystem for MSMEs to thrive – not only in terms of financing but also from initiatives that support, for example, the development of Technical and Vocational Education and Training (or TVET) skills.
“In Budget 2022, we have set aside RM6.6bil for TVET alone.
“Even our allocations for sectors such as tourism, agro-industry and the creative industries are centred on nurturing entrepreneurship skills.”
Tengku Zafrul said this in his special address at the Credit Guarantee Corporation Malaysia Bhd (CGC) 26th Financial Institutions (FIs), Development Financial Institutions (DFIs) and SME Awards 2020 virtual ceremony.
On how to make entrepreneurship accessible to all, he believes that it can be accomplished through several steps.
This includes teaching entrepreneurship from a young age; establishing an official mentorship platform; positioning entrepreneurship as a viable option for workforce development; as well as creating an enabling environment for enterprises and small businesses to thrive through Budget 2022.
“Due to the Covid-19 pandemic, our B40 (lower income) segment has grown in size, with an estimated 580,000 households in the M40 (middle income) group having fallen into the B40 category.
“The B40 represents 40% of our population, which is a significant ratio. If they are not provided with the means to survive, let alone thrive and prosper, they and their future generations may not be able to break free from the vicious poverty cycle.
“Since the Covid-19 pandemic hit our shores, the Federal Government has implemented eight stimulus and assistance packages totalling RM530bil, in addition to the Budget 2021 allocation of RM322.5bil, to protect the lives and livelihoods of the people, ensure continuity of businesses, and help the economy recover.”
The minister also commended CGC’s efforts over the past 49 years in successfully assisting MSMEs with insufficient or no collateral and track records in obtaining credit facilities.
“As a key player in the credit supplementation ecosystem, I believe CGC will remain committed in boosting the recovery momentum of the Malaysian economy from the pandemic, particularly for the MSME sector.
“And this year, CGC’s introduction of the Merdeka Awards is indeed timely as it resonates with the Malaysian Family spirit, calling for us to be more inclusive – across religious, racial, and ethnic boundaries,” he added.
CGC chairman Datuk Mohammed Hussein said CGC had reviewed and re-aligned its strategies and operational readiness to ensure they were able to support MSMEs in their business recovery phase and subsequent phases as they adjust to the new normal.
“From April 2020 to December 2021, CGC has committed to providing guarantees up to RM10bil for MSMEs affected by the Covid-19 pandemic.
“We are very confident of achieving this target.”
Mohammed added that one particular skill gap that they and other FIs needed to work on was in respect of the gig economy.
“How good are we in supporting the gig economy – in terms of evaluating new proposals and in structuring our financial products to meet their needs?
“While some FIs are further ahead in the learning curve than others, I think it is fair to say that there is still some learning to do.
“But going forward, the gig economy will be a major growth sector, especially for the younger entrepreneurs. So, we have to be able to do this well,” he said.
On the awards ceremony, Mohammed said CGC started it in 1995 with the dual aim to recognise their exemplary MSME customers who have displayed excellent credit track records and business success, as well as to acknowledge the FIs, their strategic partners, for their valuable contribution towards MSME financing and development.
At the virtual ceremony, CGC presented 31 awards, of which 13 awards were for leading FIs and DFIs and 18 were for SMEs, including nine Special Merdeka awards.
The Merdeka Awards recognises its MSME customers with multi- racial partners, reflecting the strength of Malaysia’s diversity and unity.
The nine Merdeka Awards recipients are ASP Jaya Legacy (Kuantan, Pahang); Duogo Sdn Bhd and Witty Charman CoTS Sdn Bhd (Kuala Lumpur), Hemisphera Sdn Bhd and Poppy Store Company (Kuching, Sarawak); Million Effective Sdn Bhd (Ipoh, Perak); Pets Kingdom and Rahmat Superstore (Sandakan, Sabah); and Ted Engin Sdn Bhd (Melaka).