As businesses around the world continue to contend with disruptive forces, the need to go digital is beyond critical — Malaysia understands this and allocated RM44 billion in loans and financing guarantees for small- and medium-sized enterprises (SMEs). Access to the loans is also open to micros.
This is on top of the RM900 million in financing to ramp up digitalisation and automation; RM2.4 billion for the agri-commodity sector, micro-entrepreneurs, and small-time traders; RM28 million for start-ups; and the spillover from other allocations that provide support for micros and SMEs as well (MSMEs).
All these various financing support that Budget 2024 will provide to MSMEs are focused on intensifying efforts that encourage all businesses to:
- Be more active in the marketplace to increase their competitiveness and grow revenue
- Innovate via operational transformation or through digitalisation and automation
- Consider new functions that boost their economic resilience and overall sustainability
With the lion-share of this massive allocation consisting of micro-loans, guarantees, and transformative financing that focus on digitalisation and automation for MSMEs, it is clear that the planned budget-spend for next year will directly power the growth and sustainability of most, if not all, Malaysian MSMEs.
Industry association leaders who shared their thoughts before the reading of Budget 2024, the move is very much a welcomed one. After all, these allocations will ensure SMEs across Malaysia can consider digitalisation without issue so they can remain market competitive and continue to grow in a sustainable manner.
Ding Hong Sing, National President, SME Association believes the allocation for SMEs from Budget 2024 demonstrates how Malaysia’s government of the day is willing to listen and make the effort to learn and understand the needs of SMEs.
As for the Small and Medium Enterprises Association (Samenta), its Chairman — Christopher Ng — shared how Budget 2024 is taking some right steps whne it comes to providing MSMEs with the means to update and upgrade the skillsets of their employees to ensure they can add value to their operations and the country’s economy.
“While these businesses realise that there is a (massive) need to train and up-skill their employees, they are unable to do so due to limited funds and resources. (The new) Latihan Madani is a very much-needed intervention to help SMEs raise their game, increase productivity, and strengthen resiliency,” Ng shared.
Even with the bright outlook, SAMENTA had been taken aback with another aspect from Budget 2024. Its National President, William Ng, felt introducing the new capital gains tax without consultation from entreprenuers and SMEs is a step backwards. While he acknowleged that this new taxation can increase revenue and reduce debt for the government, it must not be done at the expense of entrepreneurship.
“If a wealth tax is needded, an inheritance or windfall tax is better than a blanket capital gains tax that (is likely to) disproportionately hurst SMEs,” he said.
There is no doubt that MSMEs are a major focus for Budget 2024 as these businesses are the real drivers of Malaysia’s economy — over 97%, a fact that SAMENTA consistently brings up. As such, there is a real need to ensure that the workforce are fully equipped with the right skill-sets and tool-kits to work in the digital economy.