Image credit: The Star
PETALING JAYA: Industry players and NGO are calling on the government to invest in potential small and medium enterprises (SME) rather than give out loans and grants to help businesses.
Brainy Bunch Group founder Fadzil Hashim said there should be a stop to rhetorical statements.
“To improve the country’s economy, the government must first help SME as they are the largest employers,” he told theSun.
Fadzil, who is also the founder and owner of SME Mall and Malakat Mall in Cyberjaya, said government grants and loans may only benefit a few.
“SME and micro-businesses wanting to apply for government loans and grants must provide complicated paperwork that most SME and micro-business owners are not familiar with,” he said.
Fadzil acknowledged there are government policies that are meant to help SME and micro-businesses. But he said there is a gap between the help given out, and those in need of help.
“I suggest the government invest in a company that helps SME and micro-businesses that have the potential to grow. This way, the government has the responsibility to ensure the business grows,” he said.
Fadzil noted how Malaysia lost so many good businesses to international funding because they invest in businesses and do not give away free money.
“The government can control these investments with a system of key performance indicators (KPI) to ensure they achieve their targets,” he said.
Meanwhile, SMELink, an NGO that works with SME, says the lack of continuity in government aid is the main issue with local businesses.
Its president Datuk Rozali Che Pin said many SME and micro-business owners are at a loss on how to grow their businesses once funding stops.
“Take the Malaysia Agriculture, Horticulture & Agrotourism (Maha 2022) exhibition. After promoting their products at the event, the government does not provide further aid for the entrepreneurs on marketing strategies,” he said.
Rozali said most SME business owners cannot afford marketing fees. Hence, he suggested starting a grant for SME to market their products.
Other than the complicated application process for grants, he said the government should spend time and speak to industry players and not just those who are successful.
“Come and meet with struggling SME which desperately need help. And don’t only speak to the bumiputras. I am talking about all SME regardless of their race and type of business they are in,” he said.
In October 2021, Finance Minister Tengku Zafrul Abdul Aziz tabled Budget 2022, which was described as a lifeline for SME that will also revive the country’s economy.
TheSun had reported that Budget 2022 ensured various measures were introduced to benefit different economic sectors and social segments amid a challenging financial landscape.
The government’s decision to allocate more funds to alternative financing will further support the needs of micro, small and medium enterprises (MSME) that are underserved by traditional financial institutions, and open up opportunities for businesses that have been adversely impacted by Covid-19.
However, as we inch closer to the end of 2022, many SME said they are yet to be relieved from various financial burdens and this was proven by about 15% of micro, small, and medium-sized enterprises that closed due to a lack of funds amid the pandemic.
According to SME Association president Ding Hong Sing, there are 1.15 million SME, which account for 97.2% of businesses in Malaysia.
Source: https://www.thesundaily.my/local/invest-in-sme-instead-of-giving-out-loans-and-grants-govt-urged-LK9590805