Kuala Lumpur, 3 June 2020 – The SME Association of Malaysia is urging the government to grant RM50 billion worth of soft loans at a special interest rate to help ease the cash flow of up to 200,000 small and medium enterprises (SMEs) and help them to stay afloat during these challenging times.
The association’s president Datuk Michael Kang Hua Keong said in times of crisis, it was vital for the government to provide support for SMEs to sustain their operations as it also helps to safeguard jobs and the economy.
“Our Prime Minister [Tan Sri Muhyiddin Yassin] mentioned earlier that the economy lost about RM2.4 billion per day [since the movement control order] was implemented. Until today, I think the market has lost easily about RM200 billion. So, we are looking at the government to pump this RM50 billion into the market and enable it to push up the economy,” he told theedgemarkets.com in a phone interview today.
In addition to soft loans, he also called for tax holidays by waiving the filing of income tax payment for the 2019 year of assessment, and sought the removal of the sales and services tax (SST) to boost consumer purchasing power, in a bid to encourage them to buy more products made by local SMEs.
Kang also called upon the government to help these enterprises secure rental rebates or reductions from their landlords.
He also urged the government to open up all economic sectors to allow more businesses to resume activities in order to revive the economy which has been battered by the Covid-19 pandemic and the resulting MCO.
In addition, Kang said he hoped the government would allocate funds to allow SMEs to retrain or upskill their employees so they may adapt to the new normal, and that it would boost investment into infrastructure to further drive the digital economy.
He hoped the government will increase the matching grants for SMEs to adopt digitalisation to between RM10,000 and RM15,000 per company, from up to RM5,000 announced earlier, and widen the numbers of the beneficiaries to 300,000 SMEs from just 100,000 SMEs previously.
According to a Bernama report yesterday, the Prime Minister would announce the short-term economic recovery plan for June to December 2020 this month.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the plan would focus on three main objectives, namely to empower people, propel businesses and stimulate the economy.
In another Bernama report from May, Zafrul said the plan will highlight health guidelines and safe operating procedures in the new normal, capacity building, job creation, increasing consumer spending, especially through digital channels, and support the restructuring, recovery and growth of SMEs, among others.
Most businesses are allowed to reopen by enforcing strict standard operating procedure starting from May 4 onwards, after nearly two months of business operations being halted due to the implementation of MCO since March 18.
Prior to this, the government had in March announced the RM250 billion economic stimulus package, so called Prihatin Rakyat Economic Stimulus Package (Prihatin). The federal aid is aimed to ease the burden of rakyat and the business community amid the Covid-19 crisis and counter the impact of the MCO.
Additionally, the government has allocated an additional RM10 billion to assist SMEs under Prihatin in April.
Of the total RM10 billion, RM7.9 billion has been allocated to the wage subsidy programme, increasing it to a total of RM13.8 billion from RM5.9 billion previously, which is expected to benefit 4.8 million workers across the country.
Meanwhile, the remaining RM2.1 billion will be dispensed in the form of grants that would be channelled to micro businesses registered with the Inland Revenue Board.
-The Edge Markets
