KUALA LUMPUR, February 21 – Prime Minister of Malaysia YAB Ismail Sabri were grateful to the Divine presence because with His bounty and permission, we can gather together on this meaningful morning. Thank you to the Ministry of Finance for inviting me to complete the Opening Ceremony of the Semarak Niaga Keluarga Malaysia Program.
During my recent visit to Farm Fresh in Muadzam Shah, I had the opportunity to interact with entrepreneurs small and large, further giving a clear picture of their role in providing employment opportunities, bridging income gaps and addressing long-term challenges such as food security.
I believe that the contribution and role of local Small and Medium Micro Enterprises (SMEs) throughout the country is very important in reviving the country’s economy. Thus, the Government is always committed to ensuring that the capacity of the business sector is preserved, especially for SMEs, which are affected by the COVID-19 pandemic.
The Inauguration Ceremony of the Semarak Niaga Keluarga Malaysia Program today is a clear sign of the Government’s commitment in ensuring that the PMKS ecosystem remains competitive. The Semarak Niaga Keluarga Malaysia program with a total value of RM40 billion will increase access to financing to the business sector, especially for PMKS entrepreneurs and the informal sector.
The program includes direct loans, financing guarantees and equity injections for the benefit of every group of entrepreneurs. For micro and small businesses, the Government is sensitive to the need for access to low interest rate financing. In this regard, the TEKUN Nasional Micro Sector Business Rehabilitation Financing Scheme or CBRM, will offer loans of up to RM10,000 at an interest rate of 0 percent with priority given to informal sector traders. The size of the fund for this program alone is RM200 million.
For agro-food entrepreneurs, the micro credit scheme by Agrobank will offer loans of up to RM75,000 at 0 percent for the first six months with a moratorium facility of up to six months. For more mature businesses, financial institutions such as SME Bank will offer loans of up to RM10 million under the IBS Promotion Fund 2.0 scheme and RM1 million under the Young Entrepreneur Financing Program 2.0 (or YEF 2.0). Collectively, the fund size for these two schemes is RM300 million.
For companies that are viable but have constraints on obtaining new funds, the Government and financial institutions have devised a new, more flexible form of financing to expand the ability to revitalize the business. One of them is through equity crowd funding and peer-to-peer financing which will be supported by an allocation of RM80 million in matching grants for the Malaysia Co-investment Fund, in addition to investments by Bank Pembangunan Malaysia Berhad or BPMB, of RM100 million.
To help companies facing high indebtedness or gearing problems, funding methods in excess of RM2.1 billion through equity and quasi-equity investments are also available. This method is spearheaded by SME Bank with funds worth RM600 million. BPMB will also offer a RESET Scheme, or Rehabilitation and Support Through Equity, with a fund size of RM500 million.
Bank Negara Malaysia or BNM, also provided a Business Recapitalization Facility worth 1 billion ringgit for the same purpose. In total, a total of RM13 billion in funds is available to SMEs. For the continued availability of funds, BNM’s special funds especially the Targeted Relief and Recovery Facility and Agrofood Facility have been increased collectively by 2.5 billion ringgit to RM10 billion. The total availability of various BNM SME funds is currently RM10 billion.
The Semarak Niaga Keluarga Malaysia program also includes a business financing guarantee. In this regard, the scheme under the Business Financing Guarantee Company, or SJPP, will be enhanced by providing guarantees for scheduled and restructured financing with an additional guarantee limit of RM17 billion. This will help companies obtain new financing that was previously difficult to obtain.
I would like to emphasize that these initiatives do not take into account the improvements to the Malaysian Family Flood Relief for the affected PMKS that I have announced recently. Clearly, the Semarak Niaga Keluarga Malaysia Program and the Malaysian Family Flood Relief Program reflect the principle of the Malaysian Family where “no one is left out”, such as standing equally tall, sitting equally low, measuring equally, weighing equally.
The Semarak Niaga Keluarga Malaysia program will complement the Government’s efforts through the Financial sector in providing financing facilities and loan repayment assistance, especially in the post -pandemic recovery phase.
I am honored to be informed that:
i. From 1 June to 24 December 2021, loan repayment assistance was utilized by 95,800 PMKS borrowers and 2.7 million individual borrowers;
ii. For PMKS facing business financing problems, the Financial Counseling and Management Agency, or AKPK, is also available to offer free services including the Small Loan Settlement Scheme, or SPPK, including assistance in restructuring or rescheduling existing financing;
iii. Since the onset of the COVID-19 pandemic, BNM SME funds have been utilized by more than 53,000 PMKS with total funding amounting to almost RM20 billion; and
iv. Loans to the business segment by the banking sector registered a growth of 4.9 per cent with total loan disbursements or disbursements of RM84 billion in the fourth quarter of 2021.
In the long run, it is important for the PMKS sector to be a new driver for the country’s growth.
Under the 12th Malaysia Plan (RMK-12), the transformation of PMKS is one of the various game changer projects that will be implemented to increase the competitiveness and contribution of this segment to the country’s economic development.
Among the initiatives that will be implemented include:
i. Implementation of a micro, small, and medium enterprises (MSMEs) digitalization roadmap;
ii. The shift of PMKS focus from the local focused market to the world market;
iii. Implementation of second chance intervention programs for certain traders; and
iv. Empowerment of the cooperative ecosystem in generating a new generation of entrepreneurs.
This effort is also in line with the aspirations of the National Digital Network, or JENDELA, and the Malaysian Digital Economy Blueprint initiative, or MyDigital, which will propel Malaysia as a leader in an efficient and proactive digital economy sector, further shaping a high -income nation.
Insya-ALLAH, these initiatives will increase the contribution of PMKS to the country’s GNP to 45 percent, the contribution to the country’s exports to 25 percent and generate 2 “unicorns” of Malaysia’s pride by 2025. Indirectly, as the business sector recovers, employment opportunities will also increase. Next, the target of 600,000 job opportunities will be achieved through the contribution of job creation in the PMKS sector.
After nearly two years of facing the challenges of the COVID-19 pandemic, this year will not only be a year of recovery, but it will also be a year for restructuring, or reform. To the PMKS community, I hope that the Semarak Niaga Keluarga Malaysia Program will be a catalyst for the recovery and restructuring of the business, ladies and gentlemen.
In doing so, I call on the entire Malaysian Family – the Government, the banking sector and the business community – to meet the country’s long -term challenges and realize the aspirations of a “Prosperous, Inclusive and Sustainable” Malaysia. In the words of Bismillahhirrahmannirrahim, I am pleased to officiate the Semarak Niaga Keluarga Malaysia Program.
