KUCHING: Small and Medium Enterprise (SME) Association of Sarawak is hoping for Budget 2023 to roll out repayment assistance for B40 borrowers and microenterprises as defined by SME Corporation Malaysia.
Its president Jordan Ong said the people and small businesses still need the loan repayment assistance support as they are still recovering from the financial repercussions of Covid-19.
Speaking to the New Sarawak Tribune, he suggested that the affected or eligible groups be given options to defer monthly instalments for three months or reduce monthly instalments by 50 per cent for six months.
He said the provision of liquidity in the financial system is a key policy, thus, the government should intervene to make sure banks and financial institutions would continue supporting SMEs that suffer cash-flow problems caused by irregular business conditions.
Otherwise, he said, the increasing rate of SMEs ceasing their businesses will directly affect the country’s economy as well as the employment rate.
In addition, the budget should include structural support measures for digitalisation, innovation and reskilling to enhance SME resilience and recovery.
Ong said the Covid-19 pandemic has expedited the pace to digitalisation, pushing more consumers online and accelerating the adoption of e-commerce which would require further digital adaptation by SMEs.
“But, most of the SMEs do not have the digital presence as well as the tools for data analytics, and business owners lack visibility into changing consumer patterns.
“Thus, it has become a struggle to engage customers, and to adapt to business startegies appropriately. SMEs also lack funds and the know-how needed to adopt technological tools,” he said.
Despite the government’s initiatives to boost digitisation, only 25 per cent of businesses in Malaysia have accelerated their digital transformation plans while 60 per cent have in fact slowed down.
He added that substantial support and case-by-case mentoring is needed if SMEs are to successfully implement more complex technological solutions in their businesses.
Ong stressed that it is necessary for Budget 2023 to emphasise more assistance and allocations to SMEs as they are the lifeblood of the country’s economy contributing 45 per cent of the country’s GDP and 52 per cent of national employment, according to Department of Statistics Malaysia, 2021.
The current situation where recent research shows that the majority or 85 per cent of the SMEs anticipate that their businesses will only turn around in the second half of 2023 or later.
After three years of COVID-19 disruption, he said, the return to business normalcy depends on government policy interventions mainly to tackle short-term challenges, support short-term liquidity and availability of funding, as well as providing the right conditions and incentives for innovative businesses and potential entrepreneurs.
Ong said other supports include tax relief, employment–related measures such as wage subsidies, reduction of the foreign worker levy, and economic stimulus measures, for instance; and moratorium on loans and easy financial schemes should be considered or included in the Budget 2023.
Lastly, he said, the government as a major buyer of goods and services, has the opportunity to support SMEs directly through their purchasing policies.
“This would, on the one hand, increase stability of demand and enhance SMEs’ cash-flow, and on the other hand, benefit the government by generating significant financial savings if managed well,” he said.
Prime Minister Datuk Seri Anwar Ibrahim has previously said that the government will focus on green technology, digital economy and small and SMEs in Budget 2023 which will be presented on Feb 24.
Anwar, who is also the Finance Minister, said the government policy should also focus on improving the capacity of the SME sector because it has high potential and involves a large number of workers.
