PETALING JAYA: Entrepreneurship, small and medium enterprises (SMEs) received a major boost with Budget 2020.
Among the initiatives announced by Finance Minister Lim Guan Eng were the RM455mil earmarked for Bumiputra entrepreneurs.
A total of RM100mil loans would also be provided for Chinese community entrepreneurs with 4% interest and RM20mil for Indian community entrepreneurs, also with 4% interest.
The SME Bank will also introduce two new funds comprising RM200mil dedicated to women entrepreneurs and RM300mil to support Bumiputra SMEs with potential to become regional champions.
A total of RM70mil was also set aside for the Malaysian Digital Economy Corporation to set up 14 one-stop Digital Enhancement Centres in all states to facilitate access to financing and capacity building of businesses, especially SMEs.
The Market Development Grant (MDG) ceiling by the Malaysia External Trade Development Corporation (Matrade) was raised to RM300,000.
The ceiling of participation in export fairs was also revised upwards from RM15,000 to RM25,000, and RM50mil was allocated to encourage SMEs to participate in these promotional activities.
SME Association of Malaysia president Datuk Michael Kang welcomed measure in the Budget 2020, saying it was set to benefit SMEs ahead of Malaysia’s journey towards Shared Prosperity Vision (SPV) 2030.
"This is the best budget for SMEs as the nation nears the end of the 11th Malaysia Plan and gearing towards the 12th Malaysia Plan and the SPV 2030.
"They’re looking at how to boost SME contribution to the GDP from the present 38% to 50% by 2030," he said.
Kang's wish to see the government coming up with a one-stop centre for SMEs has also come true with the government announcing that it was setting up the Digital Enhancement Centres in all states.
"In the previous Budgets, there were a lot of support and incentives for SMEs but they were scattered everywhere.
"We needed a one-stop centre where everything is centralised so that SMEs would know where to go," he said.
Kang, however, noted that the tax on SME had gone up, with the chargeable income subjected to 17% rate will be increased to RM600,000 from RM500,000.
This is subject to the SME having paid-up capital of not more than RM2.5mil and annual sales of not more than RM50mil.
Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI) president Datuk N. Gobalakrishnan described the allocation for the Indian community as a good start and wished to see it increased in the future.
The RM20mil loans under Tekun Nasional’s Indian community entrepreneur development scheme is expected to benefit 1,300 entrepreneurs.
"We hope that Tekun Nasional will distribute the allocations accordingly.
"The Maicci will work with the government to pay attention to community development by engaging in business development for young entrepreneurs and those already running businesses," he said.
Asean Chamber of Commerce (ACC) president Datuk Moehamad Izat Emir said it was important to support entrepreneurs by giving them loans, grants and lower interest rates.
"There is a great opportunity now for Asean countries with the United States and China trade war. There is a gap.
"The banks must support the government and businesses by giving swift loans and proper loans with lower interest rates," he said.
Other than such incentives, interest rates should also be decreased to enable businesses to increase their property value by buying premises, warehouses and cold rooms, said Moehamad Izat.