SMEs call for more support

Govt relief fund has run out of money, falling short of reaching businesses most battered by the pandemic

by ALIFAH ZAINUDDIN/ graphic by MZUKRI

STRUGGLING small and medium enterprises (SMEs) are calling for more support as desperate requests for emergency funds have been rejected by lenders who say relief funds have completely sapped.

Government programmes to help SMEs weather the coronavirus pandemic have quickly ran out of money, falling short of reaching businesses most battered by the pandemic. They include a RM5 billion relief facility by Bank Negara Malaysia (BNM) to ease short-term cashflow problems faced by SMEs.

SME Association of Malaysia president Datuk Michael Kang said funds by the central bank, which were made available in March, have reached less than 10,000 businesses — many of which are low-risk and cash-rich firms. The figure accounts for just a fraction of the 1.2 million SMEs estimated nationwide.

“The banks are not offering it to those who really need the cash. The government should allocate an additional RM30 billion to RM50 billion to assist SMEs through state-owned banks like SME Bank Malaysia Bhd, Bank Kerjasama Rakyat Malaysia Bhd and Agrobank, and not commercial banks,” Kang told The Malaysian Reserve (TMR).

The facility by BNM offers a maximum financing amount of up to RM1 million where 80% of the amount is guaranteed. It is valid from March 6 until Dec 31 this year, or until the exhaustion of the allocation, whichever is earlier.

A local daily reported that applications made by several SME owners were denied with letters that read: “We have been informed by BNM that the BNM Special Relief Fund (SRF) total allocated amount of RM5 billion has been fully utilised. Hence, we are unable to proceed with your application.”

The government’s RM260 billion stimulus package includes an array of other support measures to help SMEs. They include a RM2.1 billion Prihatin Special Grant, zero-interest micro credit scheme under Bank Simpanan Nasional Bhd and Tekun Nasional worth a total RM700 million, and wage subsidies.

Despite the string of measures, the programme has failed to reach industries that are hardest hit.

Statistics by Petrol Dealers Association of Malaysia obtained by TMR showed the approval rate for SRF for petrol pump operators was low. Of the 722 station owners who responded to the survey, only 8% had their applications approved, while 14.1% were rejected. The rest pending.