It was estimated that 37, 000 small and medium entrepreneurs (SMEs) in Malaysia have closed down since the outbreak of the Covid-19 crisis.
As most economic sectors are back in operation, there are still a handful of entrepreneurs that have been badly affected and still need support to bounce back and rebuild themselves.
“Hence, the second focus, Resilient Businesses will focus on strategies to restore business capabilities which includes to ensure access to financing drive strategic investments and revive targeted sectors,” said Minister of Finance, YB Senator Tengku Dato’ Sri Zafrul Tengku Abdul Aziz in his speech.
To revive business capabilities, the Government as a facilitator will expand access to financing for business, especially for the micro entrepreneurs and those in the formal sector.
The First Strategy under the second focus, ‘Revive Business Capabilities’ comprises of four initiatives;
- Initiative 1: Microcredit Scheme
- Initiative 2: Business Financing and Alternative Financing
- Initiative 3: Business Financing Guarantee
- Initiative 4: Ease of Doing Business
Microcredit Scheme
The microcredit financing worth RM1.8 billion will be provided through various agencies to support and assist microentrepreneurs.
| Agencies | Programme/Scheme | Fund Size (RM million) | Terms |
| TEKUN | Skim Pinjaman Informal dan Mikro (SPIM) | 200 | Loan rate: 0 per centSize: Up to RM10, 000Tenure Up to 5 years (including moratorium)Moratorium: 12 months |
| TEKUN | Various microcredit schemes | 225 | Loan rate: 0 per centSize: up to RM10, 000Tenure: Up to 5 yearsMoratorium: 6 months |
| BSN | Various easy microcredit schemes | 800 | Loan rate: 0 per cent for the first 6 months, 4 per cent thereafterSize: Up to RM75, 000Tenure: Up to 5 yearsMoratorium: 6 months |
| Agrobank | Various microcredit schemes | 250 | Loan rate: 0 per cent for the first 6 months, 3.0 per cent next Size: Up to RM75, 000Tenure: Up to 5 yearsMoratorium: 6 months |
(Source: Touchpoint Budget 2022 Measures)
Business Financing and Alternative Financing
Here are the form of financing and funds introduced under the National Budget 2022.
- Business Financing and Alternative Financing
| Agency | Programme/Scheme | Fund Size (RM million) | Financing Terms |
| PUNB | Various financing programmes | 200 | Loan rate: 0 per cent for the first six months. 5.0 per cent – 8.0 per cent thereafterSize: Up to RM10 millionTenure: Up to 7 yearsMoratorium: 6 months |
| MIDF | Jumpstart financing | 50 | Loan rate: 2.0 per cent – 3.0 per centSize: Up to RM500, 000Tenure: Up to 7 yearsMoratorium: 18 months |
| Agrobank | Various agrofood financing programmes | 550 | Loan rate: 0 per cent for the first 6 months, 3.0 per cent thereafterSize: Up to RM500, 000Tenure: Up to 8 yearsMoratorium: 6 months |
| BPMB | Working capital scheme | 500 | Loan rate: 4 per centSize: RM1 million – RM10 millionTenure: Up to 15 yearsMoratorium: none |
| SME Bank | IBSPromotion Fund (IBS2.0) | 200 | Lending rate: risk basedSize: Up to RM10 millionTenure: Up to 15 yearsMoratorium: none |
| SME Bank | Young Entrepreneur Fund – YEF 2.0 | 100 | Loan rate: 5 per centSize: Up to RM1 millionTenure: Up to 10 years |
| SME Bank | SME Recapitalisation Fund | 600 | Lending rate: dividend ± 6 per centSize: Up to RM5 million Tenure: Up to 5 yearsMoratorium: 6 months |
| BPMP | RESET Fund | 500 | Not available |
| MyCIF | Equity Crowdfunding Peer-to-peer lending (P2P) | 80 | Not available |
(Source: Touchpoint Budget 2022 Measures)
- Bank Negara Funds for SMEs
| Agency | Programme/Scheme | Financing Terms |
| BNM | Targeted Relief and Recovery Facility | Loan rate: Up to 3.5 per cent per annum (including guarantee fee)Size: Up to RM500, 000Duration: Up to 7 years (including moratorium period)Moratorium: at least 6 months |
| Low Carbon Transition Facility | Loan rate: Up to 5 per cent per annum (for portion from BNM)Size: Up to RM5 million (for portion from BNM)Duration: Up to 10 years (further details to be finalised by BNM) | |
| Business Recapitalisation Facility | Lending rate: Up to 3.5 per cent per annum (for credit financing) + dividend (Determined by equity financier)Size: Up to RM5 million Duration: Up to 10 years (Details to be finalised later) | |
| Agrofood Facility | Lending rate: Up to 3.75 per cent per annum (including guarantee fee)Size: Up to RM5 million Duration: Up to 8 years | |
| Micro Enterprises Facility | Lending rate: as determined by the financial institutionSize: Micro Enterprises 9including part time workers (gig workers) using digital platform and self-employed workers): Up to RM50, 000Duration: Up to 5 years | |
| SME Automation and Digitalisation Facility | Loan rate: up to 4 per cent per annum (Including guarantee fee)Size: Up to RM3 million Duration: Up to 10 years | |
| PENJANA Tourism Financing | Loan rate: up to 3.5 per cent per annum (including guarantee fee)Size: Up to RM300, 000Duration: Up to 7 years 9inclduing moratorium period)Moratorium: at least 6 months | |
| All Economic Sectors Facility | Loan rate: up to 7 per cent per annum (including guarantee fee)Size: Up to RM5 millionDuration: Up to 5 years | |
| High Tech Facility – National Investment Aspiration | Loan rate: up to 3.5 per cent per annum (excluding guarantee fee); up to 5 per cent per annum (including guarantee fee)Size: Up to RM1 million for working capital purposes; or up to RM5 million for capital expenditure (CAPEX) or a combination of working capital and CAPEXDuration: Up to 7 years |
(Source: Touchpoint Budget 2022 Measures)
Business Financing Guarantee
Under this initiative, it aims to improve the Business Financing Guarantee Scheme through the following;
- Increase the business financing guarantee limit by up to RM10 billion, in addition to the RM20 billion announced under the PEMULIH package
- 80 per cent financing guarantee of up to RM20 million on existing financing facilities guarantee of up to RM20 million on existing financing facilities that are to be restricted and reschedules (R&R). The guarantee is over the repayment period of 36 months including 12 months repayment moratorium
- 80 per cent on new financing facilities including 12 months repayment moratorium
(Source: Touchpoint Budget 2022 Measures)
Ease of Doing Business
Here are among the measures taken and proposed by the Government under this initiative;
- Extension of tax deduction of up to RM300,000 on renovation cost until 31 December 2022 for businesses to comply with relevant SOP requirements such as ventilation and customer seating
- Tax deduction of up to RM50, 000 on rental expenses of employees’ accommodation premises until 31 December 2022
- Increase opportunities for participation in Government procurement by simplifying requirements for companies’ registration
- Business Traveller Centre
- Tax treatment:
- Deferment of income tax instalment payments
- Approval for amendments on tax estimates
- Tax deduction on rental reduction
- Carry forward accumulated losses
