BY DATO’ WILLIAM NG, EDITOR-IN-CHIEF, SME MAGAZINE
The Budget 2018 is a balanced budget, and the general public would have plenty of reasons to cheer. For small and medium enterprises (SMEs), it is mostly good news as the Budget 2018 (finally) addresses many of the issues facing SMEs.
The two key challenges for SMEs in Malaysia are the availability of financing and the shortage of skilled talents.
The new RM 7 billion Business Financing Guarantee Scheme (BFGS) for working capital and the services sector will help SMEs from the services sector to scale their business as we transition from a manufacturing-based to a services-based economy. Similarly, the RM 1 billion under BFGS to help manufacturers automate their production will help reduce our reliance on foreign workers and to rapidly scale-up production and quality. Other initiatives such as the RM 1 billion Syariah-compliant SME Financing Scheme with a 2 percent subsidy on profit rate will create greater liquidity in the market and incentivize our SMEs to be Syariah-compliant in line with our national aspirations to be a leading Islamic finance and halal hub.
The new RM 1.5 billion loan guarantee using intellectual property as collateral is a step forward, allowing SMEs in both the manufacturing and services sectors with a limited fixed asset as collateral to expand their businesses. These are on top of various other sector-specific incentives ranging from agriculture and tourism to logistics and finance.
Focus on Talents
More importantly, Prime Minister Dato’ Sri Najib Tun Razak has answered the call of many SMEs to focus on talents. The RM 200 million grant, training, and soft loan facilities for SMEs under SME Corp are very much welcomed, as are the many other initiatives to raise the skills and capability of our workforce.
It is very clear that the Government has the interest of the SMEs and the middle-income segment at heart, as evidenced by the initiatives announced recently.
Dato’ William Ng
Group Publisher / Editor-in-Chief, SME Magazine