The importance of entrepreneurship has magnified in today’s economic landscape. It introduces a crucial element of dynamism, particularly into an economic system. Entrepreneurs are often regarded as national assets mainly because they contribute in terms of innovation and jobs, as well as improve the conditions for a prosperous society.

The National Entrepreneurship Policy 2030 was launched by the Ministry of Entrepreneur Development and Cooperatives (MEDAC) in July 2019 with the objective of rationalising and refocusing all entrepreneur development programmes to support the nation’s economic agenda and create a conducive and integrated entrepreneurship ecosystem.

According to Entrepreneur Development and Cooperatives Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar, MEDAC is committed to continuing the entrepreneurship agenda and ensuring that the allocations announced would benefit the targeted sectors – in line with the aspirations under the National Entrepreneurship Policy 2030.

“The ministry will continue to provide entrepreneurial advisory services to answer inquiries, provide information and provide help and support to entrepreneurs, ” he said.

Bank Rakyat as an agency of MEDAC can play a major role in enabling the entrepreneurship industry through the small and medium enterprises (SME) and cooperatives sectors to be significant drivers of Malaysia’s economy.

SME is an important component of Malaysia’s economy. To reap their full potential, SMEs must be continuously developed and nurtured to become more competitive.

In line with Malaysia’s National Entrepreneurship Policy 2030 which seeks to have SMEs account for 50% of the nation’s gross domestic product (GDP) by 2030, Bank Rakyat is committed to supporting this key economic sector with targeted products and services.

Through its business banking division, the bank continues to expand its end-to-end financing solutions, ensuring that SMEs and micro businesses have access to the financing and assistance that they need.

The bank also helps to develop a special SME package and provides shariah advisory services as part of its financing programmes for the halal product industry’s manufacturing operations.

According to Bank Rakyat chairman Datuk Abd Rani Lebai Jaafar, the bank as a development financial institution is the pioneer of the cooperative and entrepreneurship movement in Malaysia, guided by a vision to reduce social inequalities across rural societies.

“Our mandate was to raise the social and economic status of these communities, provide them with opportunities for self-improvement and build a more promising future for their families and communities.

“From our present position of strength and capitalising on our core competencies, it is a role that we continue to play to this day, ” he said.

Financing facilities

As part of its strategy to remain competitive and adaptive to the current economic landscape, Bank Rakyat has laid out a long-term plan to diversify its financing portfolio to grow and become more sustainable in the long run.

Bank Rakyat offers Micro Financing-i to entrepreneurs who need funds and financing to expand and improve their business, while Business Financing-i, Current Account-i (eCA-i) and Term Financing-i are for companies and cooperatives.

For SMEs, Bank Rakyat will continue to provide customised packages that best suit their niche markets and the bank will also help them expand their businesses to the global market.

The bank’s Ar-Rahnu X’Change offers qualified cooperatives the opportunity to own a pawnbroking business based on shariah principles under a franchise programme.

This has experienced significant growth as it is seen as a sustainable option for a shariah developmental approach compared to the conventional pawnbroking model.

As Bank Rakyat continues to expand its products and services offering for SMEs, it is committed to working together with stakeholders to serve the national development agenda.

Renewed vision and mission

Bank Rakyat acting chief executive officer Datuk Syed Abdul Aziz Syed Hassan said the transition from the Domestic Trade, Cooperatives and Consumerism Ministry to the Entrepreneur Development and Cooperatives Ministry in 2018 has also seen the bank realign its role in the development of the entrepreneurship sector.

“Part of our commitment is the establishment of SME and cooperative centres as one of the five key blueprints that will drive Bank Rakyat towards realising our strategic plan – the Bank Rakyat 2025 (BR25) target, ” he said.

To remain vigilant and relevant, Bank Rakyat has intensified its commitment to elevate the economic well-being of members, customers and the nation through its new vision and mission. Bank Rakyat’s new vision is to be Malaysia’s No.1 progressive Islamic cooperative bank while its new mission is to “enhance the economic well-being of its members, customers and nation”.

The new vision and mission coincide with the objectives of Bank Rakyat’s establishment to improve the economic status and development of communities as well as drive the cooperative and entrepreneurship sectors for the benefit of members and customers.

This initiative is in line with the Entrepreneur Development and Cooperatives Ministry’s aspiration to rationalise and refocus all entrepreneur development programmes to support the nation’s economic agenda and create a conducive and integrated entrepreneurship ecosystem.

Establishment of SMEC

To help develop the SME, micro and cooperative industries, Bank Rakyat has set up the SME and Cooperative Business Centre (SMEC).

The establishment of the business centre is very focal for the bank to emerge as an SME one-stop centre providing not only financing but business insights and business networking.

This initiative is in line with MEDAC’s National Entrepreneurship Policy 2030 agenda, which is to establish Malaysia as a full-fledged entrepreneurial nation by 2030.

According to Bank Rakyat chief business banking officer Mohamad Shiblie Abg Sapuan, the bank will, through the SMEC, provide end-to-end processes for SME and cooperative financing, advisory services to help SMEs and cooperative customers upscale their businesses, as well as help them overcome market barriers.

“To ensure the effectiveness of the SMEC, Bank Rakyat will partner with various agencies within the MEDAC ecosystem, as well as communities, cooperatives and private organisations to ensure a system of shared prosperity, ” he said.

As of December 2020, three SMECs have begun operations in the Melaka/Negeri Sembilan, Selangor and Kuala Lumpur regions. Bank Rakyat targets to have 10 SMECs across the country by the end of 2021.

Going digital

The only way to compete and remain relevant with the ever-changing economy landscape is to adapt to the digital world.

Realising the importance of utilising the digital platform, Bank Rakyat went through a digital transformation process to a new core banking system, CoBRa, to upgrade and improve the quality and operation of its banking services.

In line with this digital transformation, Bank Rakyat will be launching Quick Response to Entrepreneurs (QR2E), a virtual banking platform for small and medium enterprises, micro and cooperative that is specifically designed to assist entrepreneurs by providing comprehensive, fast, and simple digital financial advisory services and product application as part of its Banker to Entrepreneur (B2E) initiative.

B2E is a new mindset that will enable bankers to understand matters from the entrepreneur’s point of view.

This will be the paradigm shift to unlock a new dimension of thought, consciousness and understanding of both sides of the coin – from the entrepreneur’s and the bank’s perspectives. Only then can the banker truly know the entrepreneur’s needs.

QR2E will be a platform for the bank to engage with potential customers and expand the bank’s outreach, which can be done via QR code scanning.

The content of the QR code is more personalised in terms of application and can facilitate the bank’s product and services to reach customers fast.

Targeted at mobile users, QR codes are cost-effective, universally applicable and can help Bank Rakyat to reach its target audience in the offline world and connect them directly to digital platforms. Simultaneously, this platform brings together the bank and customer.

Covid-19 proactive measures

As Bank Rakyat is aware of the challenges faced by customers – mainly those in the entrepreneurship and cooperatives sector – who have been adversely impacted by Covid-19, the bank has offered moratorium as well as targeted financial payment assistance to customers to help mitigate the financial consequences of the outbreak.

To date, 188 entrepreneurs have benefited from this assistance with a total exposure of RM3.04bil.

Bank Rakyat chairman Datuk Haji Abd Rani said these proactive measures were taken to help businesses weather the Covid-19 storm in line with its Bank Rakyat Cares initiative. RM300mil was allocated by the bank to help cooperatives, SMEs and micro businesses as well as retail-based businesses affected by the pandemic.

On top of that, BizLady, a special financing facility to help women entrepreneurs, was also introduced to ensure economic survival of businesses in the wake of the Covid-19 pandemic.

“Through this campaign, micro-entrepreneurs who met the criteria obtained financing assistance between RM1,000 and RM50,000 for a period of up to 69 months.

As for SMEs and cooperatives, its entrepreneurs obtained financing assistance between RM20,000 and RM300,000 for a period of up to 69 months as well.

“By December 2020, the RM300mil allocated fund was fully subscribed by businesses across the country, ” he said.

The Bank Rakyat Cares initiative received recognition from the Entrepreneur Development and Cooperatives Ministry. The gold award for Agency Best Programme 2020 in the category of micro, SME and cooperative financing is testament to the positive impact it brings to the local entrepreneurs’ sectors.

Community development

As part of its community outreach initiative to empower the community, Bank Rakyat has so far introduced two entrepreneurship development centres – at Pulau Bum Bum, Sabah, which processes sea produce such as fish crackers, and in Arau which works on fermented beef production.

The objective of the entrepreneurship development centres is to help the local communities by creating more job opportunities for them as well as encouraging them to venture into business. The bank is targeting to open two more centres by the end of 2021.

In 2020, Bank Rakyat also kicked off its latest project called Rakyatprenuer. Rakyatpreneur is a philanthropic initiative with the aim of uplifting B40 micro entrepreneurs with high potential to move up the business value chain.

The objective is to assist small businesses from underserved backgrounds with high potential to progress across the business value chain as well as to contribute to the local communities, and establish relationships with prospective business customers.

Twenty micro entrepreneurs were selected to participate in its pilot project, and each of them received RM5,000 funding from the bank.

To ensure a sustainable result from this initiative, Bank Rakyat will not only provide financial assistance, but entrepreneurs involved will also be given proper exposure, financial advisory, mentoring, training as well as coaching through a webinar programme as part of the bank’s collaboration with the National Entrepreneurship Institute (INSKEN).

Meanwhile, Rakyatpreneur 2.0 is expected to be launched this coming July whereby RM3mil will be allocated for the development of 300 selected asnaf recipients and B40 entrepreneurs from all over the country.

According to Bank Rakyat chief marketing and communications officer Nizam Sani, the bank is positive that such an initiative will strengthen the talent of local entrepreneurs and cultivate an entrepreneurial culture among the community, in line with the government’s aspiration for Malaysia to become a high-income entrepreneurial country.

Teach them young

For a bank that provides financial solutions to all walks of life, Bank Rakyat is not leaving the kids behind when it comes to promoting entrepreneurship.

Through its Kelab Nuri, Bank Rakyat has been actively conducting activities for the children’s development.

In August 2020, Bank Rakyat achieved a milestone when it was listed in the Malaysia Book of Records for the largest school participation in an entrepreneurship initiative – 132 schools and 24,657 students took part in the Nuri Teenpreneurship programme nationwide.

Such an initiative is crucial as the younger generation will be exposed and equipped with a wide range of skills within the entrepreneurship framework.

“On top of that, in line with our core community outreach initiative, which is to provide nutritional food to underprivileged students, Bank Rakyat also has an initiative called Kebun Nuri Nutrisi, which gives financial assistance to schools and universities to fund the development of community gardens.

“Through the programme, participating schools and universities are able to purchase agricultural equipment, soil, fertilisers, seeds and packaging which can be used to grow crops to sustain Nuri Nutrisi initiatives by allowing kids to sell the surplus produce from the respective gardens.

“Kebun Nuri Nutrisi not only allows us to help student get nutritional food supply, but also to help in nurturing the students’ passion for entrepreneurship, ” Nizam added.

Source: https://www.thestar.com.my/news/nation/2021/04/12/financing-and-aid-for-smes-and-micro-businesses