The Small and Medium Enterprises Association of Malaysia (Samenta) said expansion plans that had been put on hold as a result of the pandemic could now be implemented, while the SME Association of Malaysia felt that the focus on SMEs was essential given that they accounted for the largest proportion of enterprises in Malaysia.
Apart from a reduction in taxes from 17% to 15% for the first RM150,000 in earnings for MSMEs, Prime Minister Anwar Ibrahim also announced an increase in loan facilities for these businesses.
Samenta chairman William Ng said while the SMEs had hoped for a reduction in taxes for the first RM500,000 in earnings, they were nonetheless happy with the lower threshold.
The government will also allocate RM50 million for building and upgrading 3,000 stalls and kiosks for small businesses nationwide.
Of the total, RM40 billion will be in the form of loan facilities for MSMEs through government agencies, RM20 billion in loans to SMEs in high value sectors through Syarikat Jaminan Pembiayaan Perniagaan, RM10 billion in loans for SMEs through Bank Negara and another RM1.7 billion in loan facilities under Bank Negara, Bank Simpanan Nasional and Tekun.
Over and above that, Bank Negara will also provide RM2 billion in loans to support green technology startups and to help SMEs embrace low-carbon practices.
“The loan facilities are helpful at a time when SMEs are under pressure to invest in digitalisation and automation as well as to make the transition to a low-carbon economy,” Ng told FMT Business.
He said many SMEs had to put on hold these initiatives because of the pandemic as well as the high cost of doing business.
“The additional funds will be a stimulus for SMEs to embark on this journey of upgrading their operations,” he added.
SME Association of Malaysia president Ding Hong Sing noted that the interest rate on the loans under the new initiative was still unclear.
He said the government should emphasise on efficacy in the disbursement of these loans rather than just making the allocation in the budget.
“The process to apply for the loans should also be clear (and not require) many documents,” he told FMT Business.
He said it should not take more than six months to disburse the loans if the government wants to help SMEs.
“Given the digital technology and capabilities at hand, there is no reason for the approval process to proceed slowly,” he added.
Ding, who commended the government for its budget, said it is also important to upgrade facilities to facilitate Malaysia’s journey to high-income status.