PETALING JAYA: Battered and bruised by the Covid-19 pandemic, the nation’s small and medium enterprises (SMEs) have now been given a “lifeline” in Budget 2022.
These SMEs have suffered from decreased sales revenue and tightened cash flow. They have faced a lack of labour and difficulties in adopting technological solutions to digitalise their business.
As such, the RM14.2 billion in funds available for SMEs in Budget 2022 is “like a lifeline” for SMEs, said Universiti Malaya senior economics lecturer Goh Lim Thye.
“They will be able to solve their cash flow problems with these grants.”
With the pandemic proving just how important it is for businesses to have an online presence, Goh said the RM200 million digitalisation grant would be especially useful as it would encourage SMEs to explore such opportunities for their businesses.
Out of the RM200 million, RM50 million has been set aside to digitalise Bumiputera micro entrepreneurs in rural areas.
Goh noted how the online shopping boom has seen platforms such as Lazada and Shopee generate massive sales over the past few years, especially during promotion periods.
According to Shopee, their 11.11 sale saw two billion items sold this year, which Goh said proved that “digitalisation is the way forward for all SMEs”.
Goh also said the e-commerce industry generated RM896.4 billion in revenue last year despite the pandemic. The figure is a 32.7% increase from the RM675.4 billion recorded in 2019.
Sri Ganesh Michiel, deputy secretary-general of the Federation of Malaysian Business Associations (FMBA), said digitalisation can help SMEs accelerate their economic recovery.
“But every digitalisation measure needs strict regulations to ensure there is growth in profits for businesses,” he said.
“We would suggest that the government introduce special budgets for the various industries, based on their requirements.
“This is because industries will have different issues during this recovery period.”
He said SME owners were currently facing “very tight” business cash flow but had difficulties in obtaining loans from financial institutions. Hiring local employees for certain jobs was another major issue .
This ties in with Goh’s optimism about the loans available for SMEs under Budget 2022.
The economist said while SME owners may be worried about their ability to service loans, having access to such funds in the first place was a bigger concern.
“But now with the allocation under Budget 2022, at least they know that as a last resort, they can go and get a grant or a loan to finance their operations,” Goh said.
Source: https://www.freemalaysiatoday.com/category/nation/2021/12/14/rm14-2bil-in-funds-under-budget-2022-providing-a-lifeline-to-smes/