KUCHING: A state-owned financial institution will aid Small- and Medium-sized entrepreneurs (SMEs) in expanding their economic activities and recover from the pandemic.
According to SME Sarawak president Jordan Ong, the establishment of the institution will provide timely funding options for local SMEs.
He also mentioned that it will enable the Sarawak government to have more control over loans and funds distribution to prevent otherwise-solvent firms from going bankrupt and impacting the state’s economy and employment rate.
Furthermore, Ong suggested that the institution will provide new investment opportunities for the region that could broaden the existing tax sources.
On Tuesday, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg announced that the proposed financial institution would provide facilities for loans and funds based on economic principles. The government aims to equip entrepreneurs with at least basic economic knowledge to move forward. The details of the institution will be announced in two months.
Ong agreed that besides loans and funds, SMEs need to be equipped with the knowledge of adopting new technology.
He pointed out that only 25 per cent of businesses in Malaysia have accelerated their digital transformation plans and 60 per cent have slowed down despite the government’s initiatives to boost digitisation.
“Transformation and innovation in digital skills are necessary to achieve business sustainability now and in the future,” said Ong. “Government support and policy interventions can facilitate this process and help firms overcome hurdles on their digitalization journey,” he said.
Ong also emphasised that the state government must allocate more aid and resources to SMEs, as they significantly contribute to the country’s economy and employment rate.
According to the Department of Statistics Malaysia, SMEs contribute 45 per cent of the country’s gross domestic product (GDP) and 52 per cent of national employment.
He said that after three years of COVID-19 disruption, the return to business normalcy depends on government policy interventions to tackle short-term challenges and provide the right conditions and incentives for innovative businesses and potential entrepreneurs.
Additionally, the government must provide structural support measures for digitalisation, innovation, and reskilling to enhance SME resilience and recovery.
