Sim urges agencies to rethink financing criteria for entrepreneurs
GEORGE TOWN: Ten agencies under the Entrepreneur and Cooperatives Development Ministry have been told to consider alternative criteria when assessing financing applications.
Its minister Steven Sim (pic) said the agencies should verify orders and invoices when assessing an entrepreneur’s ability to repay, rather than relying solely on conventional credit assessments.
“Credit history is one of the biggest reasons some entrepreneurs cannot get financing.
“You may have some issues with your credit record but if your cash flow is good, we can still give you financing,” he said.
Sim said nearly RM9bil in financing had been channelled to about 250,000 entrepreneurs nationwide in the first seven months of this year, putting the ministry on track to meet its RM15bil financing target for 2026.
Of this, RM3.4bil in new financing had gone to about 34,000 entrepreneurs accessing financing for the first time.
In Penang, nearly 6,000 entrepreneurs had received RM737mil.
Sim said ensuring sufficient financing is available to entrepreneurs remains one of his priorities, particularly amid a challenging global economic environment.
“We are an open economy, so we are affected by global developments, including trade and tariff wars,” he said during a visit to The Star in Jalan Masjid Kapitan Keling here yesterday to mark the Mid-Autumn Festival.
Sim said the RM9bil disbursed so far would also have a wider multiplier effect on the economy as the funds move through businesses and their supply chains.
“The effect of RM9bil being released into the market is that the money flows.
“Even if you did not get the financing, your vendor, customer or your customer’s customer may have received it,” he said.
Sim also said the ministry is targeting to help 10,000 entrepreneurs scale up their businesses this year.
So far, 3,827 entrepreneurs have moved from the informal to micro-business category, while 2,235 have progressed from micro to small businesses and 518 from small to medium-sized businesses.
This has brought the total number of entrepreneurs who moved up the business scale to 6,580, or more than half of the ministry’s 10,000-entrepreneur target for 2026.
Sim said the ministry has also simplified financing procedures and shortened processing times.
“For example, under the National Entrepreneurial Group Economic Fund, we said approval must be given within seven days. In the past, it could take 30 to 40 days.
“Entrepreneurs can also apply online now instead of having to go to the office.
“For Bank Rakyat and SME Bank, applicants seeking loans below RM1mil must receive a status update within 14 days. Previously, the process could take up to three months,” he said.
He said the ministry’s financing schemes are primarily aimed at entrepreneurs already operating their businesses.
“For Bank Rakyat and SME Bank, we usually look at businesses that have been operating for two years or more,” he noted.
“Under SME Corp, we have reduced that to one year and above. As long as they have a track record, we can look into it.”
But in the case of start-ups, Sim said businesses still at the proposal or very early stage would generally require different forms of funding.
“There are other agencies and funds that cater to that,” he said.
At another event, Sim said the ministry has submitted proposals to the Finance Ministry for Budget 2027 to provide more resources for micro, small and medium enterprises (MSMEs).
“The three main thrusts of the proposals are more resources for MSMEs, greater efficiency in government service delivery, which means reducing bureaucracy and so on, and reducing the cost of doing business in Malaysia,” he told Bernama during a visit to its Penang bureau.
