KOTA KINABALU: Malaysian businessmen should go for unconventional ways of getting funds such as venture capital that is now popular, said Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong (pic).
He said other alternative financing sources, such as crowd funding, could help entrepreneurs cope with escalating costs due to the drop in the value of the ringgit.
"Businessmen who have to import raw materials should also consider hedging but they should have the proper knowledge.
"They can also seek the advice of banks,” said Dr Wee after opening the Secretariat for the Advancement of Malaysian Entrepreneurs (SAME) financial roadshow at Penampang near here on Thursday.
(Currency hedging include forward contracts that lock in the current exchange rate for a future transaction date.)
Dr Wee said SME operators were hoping for the value of the ringgit to stabilise at about RM4 or RM4.1 against the US dollar.
He said many small and medium enterprises cannot cope with more than a 20% margin in terms of their costs.
He said some local industries such as rubber glove and condom manufacturers were however benefitting from the depreciation of the ringgit.
In another development, Dr Wee said SMEs should be well prepared to take advantage of the various loans available from various financial institutions such as the SME Bank and MCA’s Koperasi Jayadiri Malaysia (Kojadi).
“They should have proper documentation as well as accounting and bookkeeping systems,” he added.
Citing an example, Kojadi received 635 applications for the government’s RM50m loan facility for SMEs.
To date 108 applications had been endorsed and of these 56 applications worth RM13.2mil had been approved after fulfilling all the requirements.
“The response has been overwhelming and we expect more application from Sabah and Sarawak,” he said.
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