In the economic
stimulus package announced on March 27, 2020, Prime Minister Muhyiddin Yassin
announced that steps will be taken to alleviate the burden of the COVID-19
pandemic on SMEs.
A total of RM4.5
billion that encompasses 5 main initiatives will be used to carry out these
Easier Financing Access
First of all, the
government will add funds to the RM3 billion Special Relief Facility for SMEs,
bringing the total to RM5 billion.
In addition, the interest
rate for the entire fund will be reduced from 3.75% to 3.5%.
Secondly, the size
of the fund will also be increased by as much as RM1 billion to RM6.8 billion
under Kemudahan Semua Sektor Ekonomi to enhance financing
access to all SMEs.
Third, the government
will provide additional funds of RM500 million under the Micro Credit Scheme
which makes a total of RM700 million allocated for easy financing.
The scheme will be run
by Bank Simpanan Nasional, who’s offering only 2% interest free of charge.
requirements will also be extended with a minimum of 6 months of operation compared to 1 year of
The financing amount
is also increased from a maximum of RM50,000 to RM75,000 per entrepreneur.
The initiative is open to all micro entrepreneurs in all business sectors including taxi operators, bus operators, the creative industry, and online traders.
Fourth, for SMEs
with business records of less than 4 years, you can also take advantage
of the BizMula-i and BizWanita-i Syarikat Jaminan Kredit Malaysia Berhad (CGC)
schemes for financing up to RM300,000.
The fifth initiative
includes Syarikat Jaminan Pembiayaan Perniagaan (SJPP) providing RM5 billion
worth of guarantees as well as increasing the guarantee rate from 70% to
80% for SME companies that have trouble getting loans.
To Alleviate Cash
Undoubtedly, many SMEs
are facing cash flow issues, so the government also announced a few initiatives
to tackle them accordingly.
To start off, EPF will
introduce the Employment Consultation Service programme on April 15,
This service includes
options for delaying payments, restructuring, and rescheduling employer
The government expects
this measure to provide cash flow savings to employers at an estimate of RM10
The initiative will
benefit more than 480,000 SMEs and affected companies, while saving over 8
Secondly, there is also an exclusion from levy payments for the Human Resources Development Fund (HRDF) for all sectors for a period of 6 months beginning April 2020.
This measure is
expected to assist company cash flow with an overall saving of RM440 million.
Concerned over the
problems faced by some 750,000 SMEs, the government has also allowed the suspension
of income tax instalment payments for all SMEs for a period of 3 months
beginning April 1, 2020.
This is in addition to the previously announced measures under which the government allowed the postponement of tax instalment payments to businesses affected by the tourism sector for 6 months beginning April 1, 2020.
For those in other
affected sectors, you are allowed to amend the tax amount income
incurred in the third, sixth and ninth monthly instalments during the business
As per the government’s previous announcement, it also welcomes the willingness of banking institutions to offer a 6-month delay or loan repayment moratorium, conversion of credit card balances to term loans, and restructuring of corporate loans to assist SMEs and individuals.
Muhyiddin stated that this step is important in enabling companies to continue maintaining employment and to continue their business activities. This initiative involves a total of at least RM100 billion.
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Featured Image Credit: Muhyiddin Yassin FB
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