Asean, he emphasises, is in fact the new China and is set to become not just the world’s factory but also a significant consumer base.
The ten nations that comprise Asean are already home to more than 678 million people, with a combined gross domestic product (GDP) of about US$3.7 trillion (RM17.4 trillion) in 2022.
As a bloc, Tengku Zafrul noted that Asean is the fifth-largest economy in the world, with a middle class of roughly 350 million, representing US$300 billion (RM1.41 trillion) of disposable income.
He pointed out that the flow of foreign direct investments (FDIs) into Asean went up by 5% – pushing its share of global FDI to an all-time high of 17% – last year, despite global FDIs falling by 12%.
“In short, our own SMEs’s survival in local supply chains could help them to capitalise on not only Asean’s growing middle class but also the shifting of supply chains and FDIs into this region,” he said.
Tengku Zafrul said the government acknowledged the significant influence of external factors on businesses and recognised that even well-managed companies could suffer setbacks from circumstances beyond their control, especially in the ever-evolving economic landscape.
“Sudden shifts in market conditions, unforeseen disruptions, or internal struggles can push promising companies to the brink of failure and have far-reaching consequences for a production’s entire supply chain, encompassing suppliers, customers, employees and possibly the surrounding communities,” he said.
Given such factors, he highlighted the need to provide these companies with a financial lifeline to ensure that their supply chains remain intact, which, in turn, is crucial to the nation’s socio-economic development.
The minister said this in his speech during the memorandum of understanding (MoU) exchange between the Malaysian Industrial Development Finance Bhd (MIDF) and the Credit Counselling and Debt Management Agency (AKPK) to offer financial assistance under MIDF’s Second Chance Financing scheme.
The scheme offers financing from a minimum of RM50,000 to a maximum of RM5 million at a rate of 3% per annum on monthly rest, with a tenure of up to 10 years.
“The scheme provides struggling SMEs with an opportunity to secure equity and debt financing, especially in cases where they encounter challenges obtaining funding from traditional banks or other financial institutions,” said MIDF chairman Abdul Rahman Mamat.