Medac to look into aid allocation for small businesses in Budget 2021


THE Ministry of Entrepreneur Development and Cooperatives (Medac) is currently looking into various options and ways to further support small business owners in Budget 2021.

Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar (picture) said funds especially for the development of facilities for business owners is also part of the request.

“For the upcoming budget, we are requesting for at least a small amount of allocation for development,” Wan Junaidi said at the memorandum of agreement signing ceremony between the ministry’s agency SME Corp Malaysia and Axiata Digital Services Sdn Bhd yesterday.

“For example, when I went to Kelantan, I was informed that they have a space for entrepreneurs that is not adequate until a special facility is also set up there, but the unfortunate part is that they come to me to express this problem they are facing and I do not have the source of funds to help with this,” he added.

He further said similar concerns have been shared from micro-entrepreneurs in Sabah and Sarawak.

“As we are currently performing the 2020 Census, I have already given a fair warning to the Cabinet that we may have over one million informal micro-business owners.

“As of now, we assume there is only one million of them, but I feel there are a lot more especially in more remote locations including Sabah and Sarawak, and unless registered, they were not provided with any aid during the Movement Control Order other than individual aid for people within the B40 (bottom 40%) household,” he said.

Wan Junaidi explained that the government does not have a specific amount to allocate for informal businesses as the business owners are not registered with the government.

He added that once they are known or identified and registered to the government’s database, the financial aid for them that are specifically catered for helping with their work will be provided automatically.

“Similarly, we are looking at various perspectives and options to provide them with the aid, whether it be loan, grant or aid,” the minister said.

He added that for some people, they may have lost the items they use to prepare the food or products, which will need replacement.

Additionally, the ministry is proposing ways to encourage alternative micro-financing ways to the Cabinet, including tax relief, tax rebate or credit guarantee for companies from the government.

“The ministry would facilitate and promote access to a diversified financial landscape via alternative financing platforms spearheaded by the private sector.

“We are looking into the trend where the government’s commitment is reduced due to other commitments,” he said.

Meanwhile, the collaboration signed yesterday is expected to benefit micro-enterprises in Malaysia via Aspirasi Assist, an initiative from Aspirasi, a digital financing services provider under Axiata Digital Services.

The micro-financing from RM1,000 to RM20,000 is Shariah-compliant, while offering six-month grace period, profit rates as low as 0.5% and approved applicants will receive funding within 48 hours.

Axiata Digital Services CEO Mohd Khairil Abdullah said applicants would be evaluated on eligibility via the group’s artificial intelligence (AI) technology machine with a credit scoring engine.

“We have this database where applicants will put in the necessary information and the AI would evaluate if they are eligible to receive the micro-financing.

“It’s hard to give a proper list of criteria as of now, because it’s relying on the calculations of technology,” he said.

Aspirasi ED Sheyantha Abeykoon said the company’s core value is to financially assist the underserved community.

“By supporting them in their time of need, small and medium enterprises will be able to continue their business aspirations without financial worries during this challenging period,” he said.