Malaysia’s RM 22.2 billion allocations for small and medium enterprises in 2018 will lead to a higher gross domestic product, which will increase by up to 7.5 percent, according to Prime Minister Datuk Seri Najib Tun Razak.
The government will spend the allocated funds for development programmes, including financing, capital guarantees, easy loans and tax incentives by the Ministry of International Trade and Industry Malaysia’s SME Corporation Malaysia (SME Corp).
Free Trade Zone
Najib said that the recent launch of the Digital Free Trade Zone (DFTZ) would allow almost 2,000 SMEs to expand their exports, which could reach around US$38 billion. Their export businesses will be a boon for employment with 60,000 new jobs created by 2025. While growth awaits them, many businesses admitted that they have struggled to cope with increasing costs, according to an SME Corporation survey.
However, an SME Corporation grant among other solutions under next year’s budget will tackle many issues such as green technology, tourism, entrepreneurship and promotions. The agency has been active in helping out local firms, especially when natural disasters affect the latter.
For many SMEs, the issue of relief from natural disasters and other calamities is foremost for many business owners. The recent flooding in Terengganu has led to business losses for local SMEs. But those who incurred damages may seek emergency aid either in cash or kind as deemed fit by SME Corp, according to Nawi Mohamad, Terengganu Rural Development, Entrepreneur, Cooperative and Consumerism committee chairman.
Emergency loans for qualified businesses will amount between RM50,000 and RM100,000, while the agency will provide up to RM20,000 of funding grants. In 2016, 16 local enterprises in the Malaysian state received RM160,000 of emergency assistance.
A stable 2018 awaits small and medium enterprises in Malaysia due to the expanded funding coverage by the government. Local companies should prepare on how they could take advantage of more funding for business development.