PEMERKASA: Key Initiatives For SMEs And Businesses
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Yesterday, Prime Minister Tan Sri Muhyiddin Yassin unveiled yet another stimulus package aimed at boosting the nation’s recovery amidst the challenging Covid-19 economic landscape. Worth RM20 billion, the PEMERKASA stimulus package will focus on five key areas this time, including controlling the spread of Covid-19, driving economic recovery, and strengthening Malaysia’s competitiveness.

Aside from financial aids provided for individuals, the PEMERKASA stimulus package also features numerous initiatives for small and medium enterprises (SMEs), as well as businesses in the tourism and retail sector. Here’s a list of financial aids that these businesses can look forward to:

Initiatives For Entrepreneurs, SMEs, And Businesses

Financing Aids For SMEs And Other Businesses
sme

(Image: Hari Anggara)

The Geran Khas Prihatin aid has been renewed for the third time (GKP 3.0) to alleviate the financial burden faced by SMEs due to Covid-19. Previously offering a one-off assistance of RM3,000 to eligible businesses, this latest version will provide RM1,000 instead. Applications are set to begin from 1 April for SMEs that were not approved for the aid prior to this.

Aside from that, Bank Negara Malaysia (BNM) has also increased the Targeted Assistance and Rehabilitation Facility (TRRF) by another RM2 billion. With this, the total allocation for this facility – which is intended to support affected SMEs in the services sector – now stands at RM4 billion. Applications are open until 31 December 2021 or full utilisation of the available fund.

Microcredit Facilities For SMEs, Entrepreneurs, And Other Businesses
businesses reopen

(Image: The Straits Times)

The government will provide an extra RM500 million for the microcredit facility aimed at assisting SMEs, in addition to the original RM1 billion that was already earmarked via Budget 2021. This fund will be disbursed through several programmes under Bank Simpanan Nasional (BSN), TEKUN Nasional, MARA, and SME Corp. Specifically:

BSN

RM300 million will be channelled to assist SMEs via loans with a funding limit of RM50,000, at a reduced interest rate of 3% instead of the previous 3.5%. The loan tenure will last for five years, and instalment payments will only start after the sixth month.

TEKUN NASIONAL

There are three programmes under TEKUN Nasional that SMEs and entrepreneurs can enroll for:

  • Informal Funding Scheme: TEKUN will provide additional funding of RM60 million for entrepreneurs in the informal sector. Small-scale businesses operating from home and night markets will be allowed to borrow up to RM5,000.
  • TEKUN Mobilepreneur: Intended for entrepreneurs who provide delivery services via motorcycles, this programme will be expanded to include the financing of new purchases or repairs of motorcycles with a limit of RM10,000. On top of that, a 100% exemption of excise duties on locally assembled motorcycles (150cc and below) will be provided starting from 1 April to 31 December 2021.
  • TEKUN POS-preneur: A new programme for those who earn their income through delivery contracts. It will provide financing assistance of up to RM30,000 for vehicle repairs, and up to RM50,000 for the purchase of vans or lorries.
MARA

RM50 million will be disbursed via MARA’s Micro Prihatin Business Financing Scheme, targeted at assisting 1,000 bumiputera micro-SMEs. The maximum amount that can be borrowed is set at RM50,000 with an interest rate of 3%.

SME Corp

Local SMEs can borrow up to RM250,000 at an interest rate of 3%. A total of RM50 million has been earmarked for this assistance.

Financial Aids For Digitisation Of Businesses

sme digitalisation grant

The government has also allocated more funds for several existing and new facilities that are meant to aid businesses in digitalising themselves.

The current SME Automation and Digitalisation Facility (ADF) will receive an additional RM700 million to help Malaysian SMEs that wish to purchase equipment and assets required for their automation and digitisation aspirations. On top of that, the SMART Automation Grant (SAG) will receive a further injection of RM50 million to provide more matching grants for SMEs and mid-tier companies in the services sector that wish to leverage on technology for better efficiency.

RM50 million will also be provided to the Industry4WRD programme under the Ministry of International Trade and Industry (MITI). The Industry4WRD programme was launched back in 2018 to drive the digital transformation of the manufacturing and other related services sector in Malaysia.

Meanwhile, the Malaysian Industrial Development Finance (MIDF) will allocate RM200 million as financial aid for companies that wish to upgrade themselves via automation, digitisation, and the utilisation of green technology. The interest rate will be set at 3% instead of the original 5% for a period of 12 months, starting from 1 April 2021.

SME Bank also has a financing fund worth RM200 million to help companies purchase machines so that they can automate their processes and reduce dependency on foreign workers. A grant incentive of up to 20% on the value of the machines will be given.

Financial Aids For Cooperatives

The Cooperative Commission of Malaysia (SSM) will provide financing initiatives of up to RM100,000 without collateral to help affected cooperatives. The funding application will be simplified, and the process will be accelerated by providing repayment flexibility six months after funding approval.

Aside from that, a separate RM50 million from the SSM’s Revolving Capital Fund will also be allocated to help more than 14,000 cooperatives. The Digitalisation Matching Grant that was previously offered only to companies will now be extended to cooperatives as well, allowing them to expand their business activities on digital platforms.

Marketing Initiatives For SMEs And Businesses

While there is limited information for now, the government has said that it will introduce the eBizLink initiative, a virtual and hybrid digital marketing platform, as well as the Globepreneur initiative to highlight more SMEs that have the potential to enter the international market.

Additionally, the ceiling for the Market Development Grant (MDG) will also be increased from RM300,000 to RM500,000 per company for businesses that participate in international exhibitions. Essentially, the MDG is a grant that is intended to assist eligible businesses in carrying out export promotional activities.

Aids For Female, OKU, And Other New Entrepreneurs

(Image: Malay Mail/Hari Anggara)

Women entrepreneurs will be assisted via the SME and MicroSME e-Commerce Campaign, as well as the Shop Malaysia Online programme, with an injection of an additional RM30 million. This will provide greater opportunities for them to access online markets and expand their businesses. BSN will also provide RM50 million for the new PEMERKASA-NITA Microfinance Scheme to encourage women entrepreneurs to venture into business.

Meanwhile, the government will provide an allocation of RM20 million for programmes that support disabled and elderly entrepreneurs, such as the marketing of their baked good and handmade products. These programmes come under the purview of the Women, Family, and Community Development Ministry.

Additionally, disabled entrepreneurs will be able to tap into a microcredit scheme set aside especially for them. With a total fund of RM25 million, eligible applicants can get loans of up to RM50,000 at an interest rate of 3% from this Skim Mikrokredit ISTIMEWA.

On top of that, the government is also injecting more funds into entrepreneurial training programmes for youths, such as the Pemerkasaan Ekonomi Komuniti Bandar Programme and the Tunas Usahawan Belia Bumiputera (TUBE) programme. The New Gen Entrepreneur Online Bootcamp (N-GENE) programme will also be introduced for the purpose of preparatory training and online business coaching for about 2,000 youth entrepreneurs.

These young entrepreneurs will also have their own microcredit financing scheme by the name of PEMERKASA-Belia. Similar to the Skim Mikrokredit ISTIMEWA for disabled entrepreneurs, these applicants will also be able to borrow up to RM50,000 at an interest rate of 3%.

Lastly, in a bid to encourage the growth of entrepreneurship within the country, the Companies Commission of Malaysia (SSM) is providing free business registrations for individuals from selected groups who aspire to become entrepreneurs. These include those from the B40 and disabled community, as well as full-time students in institutions of higher learning.

Initiatives For The Tourism And Retail Industry

Exemptions Of Taxes And Duties

In a bid to boost the recovery of the tourism industry via domestic tourism, the government has extended the exemption for tourism tax and services tax for hotel accommodation until 31 December 2021. On top of that, tourists can also enjoy reduced entrance fees for entertainment premises within the Federal Territories following the introduction of an exemption on entertainment duty. This applies for premises such as theme parks, stage performances, sports events, and movie screenings.

Individuals who purchase tourism packages from tour agents that are registered with the Ministry of Tourism, Arts, and Culture (MOTAC) are also eligible for tax relief of up to RM1,000.

Leeway In Tax And Levy Payments

Companies from the tourism sector and a few other industries, such as cinema and spa operators, will be allowed to delay their payments for monthly income tax between the period of 1 April until 31 December 2021. Affected tourism and retail companies will also be allowed to hold off on paying the Human Resources Development Fund (HRDF) levy until June 2021.

Financial Aids For Tourism Players
empty mall in kuala lumpur

(Image: Bloomberg)

The third Wage Subsidy Programme (WSP 3.0) will be extended for an additional three months for companies involved in tourism, retail, and wholesale trade, as well as businesses that were closed during the movement control order (MCO). This will involve an extra allocation of RM700 million on top of the RM1.5 billion that was provided for the original WSP 3.0 (between January until June 2021). This extension is expected to benefit 400,000 employees and 37,000 employers.

Meanwhile, 5,000 tour agencies that are registered with MOTAC will also receive a one-off Special Assistance Grant of RM3,000, whereas another 4,000 registered homestay operators will get a cash assistance of RM600.

Extension Of Electricity Bill Discount

The existing special electricity bill discount of 10%, which is provided for businesses in six commercial sectors – will be extended for three more months, until 30 June 2021. The six sectors include hotel operators, theme parks, convention centres, shopping malls, local airline offices, and travel agencies.

***

With this, we hope that you now have an idea of some key initiatives from the PEMERKASA stimulus package that SMEs, MSMEs and other businesses can tap into! With the country now already in the fifth stage of a six-phase strategy to improve the country’s economy (Revitalise), the government hopes not only jumpstart the economy, but also transform it into something better.

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