PETALING JAYA: The RM2bil financing scheme under the Short-Term Economic Revival Plan is a step forward in helping small-medium enterprises (SMEs) that are struggling with cash flow, says an industry group.
Associated Chinese Chambers of Commerce and Industry of Malaysia SME committee chairman Koong Lin Loong said the loan would allow SMEs more room to breathe in the present trying times.
“The additional loan will be helpful for those that did not get the Special Relief Fund for SMEs announced by the government earlier.
“The loan will help companies to ease their cash flow problems, enabling them to restart their operations and kickstart the economy.
“It is estimated to benefit some 5,000 SMEs in the country, ” he said.
Yesterday, Prime Minister Tan Sri Muhyiddin Yassin announced that the banking sector would offer an additional RM2bil through a financing scheme from mid-June, with a cap of RM500,000 per company.
Koong also lauded the government’s initiative to encourage small companies and SMEs to digitalise their operation by financing the transformation with the private sector through a matching grant of RM140mil.
“Companies can use the grant for training sessions, vendor subsidies and sales assistance to help them transform, ” he said.
SME Association of Malaysia president Datuk Michael Kang described the RM35bil direct fiscal injection in the economic revival plan as “very comprehensive”.
However, he said the RM2bil loan should be higher to help more companies to regenerate post-Covid-19.
“With a cap of RM500,000 for each firm, on average only 4,000 companies will get it while we have close to a million SMEs in the country.
“If the SMEs are not assisted, they will not be able to survive, provide jobs or grow the economy.
“Such a chain reaction will adversely affect employment despite efforts to safeguard it.
“A higher amount of RM50bil should be set aside as it is in the form of a soft loan that can be collected back, ” he said, adding that nearly 70% of SMEs had depleted their cash reserves.
The loan, said Kang, would enable companies to pay their suppliers, retain workers and continue operations, including paying for their fixed expenditure, which would greatly help to kickstart the economy.
Malaysian Retailers Chain Association president Datuk Seri Garry Chua agreed, saying that more could be done to assist SMEs, which were currently facing the brunt of the Covid-19 fallout.
He said more loans should be provided to the 900,000 SMEs across the country as many of them were facing cash flow problems due to the stagnant economy.
“Even those operating during the conditional movement control order are facing problems because they are registering an average of 30% sales each month, ” he said.
Malay Chamber of Commerce Malaysia president Dr Abdul Halim Husin welcomed the bumiputra relief financing initiative, saying it was a good inclusion.
Abdul Halim said the Perbadanan Usahawan Nasional Bhd initiative to provide RM200mil financial assistance for bumiputra-owned shariah-compliant businesses would help many bumiputra-owned SMEs.
“The wage subsidy programme, which will be extended for three months with a subsidy of RM600 per employee for all eligible employers, is also a very positive move.
“Wage subsidies are an effective measure to assist employers in easing their financial burden, ” he said.
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