Permai package needs tweaking

SME entrepreneurs say the package could be amended to ensure its inclusiveness and effectiveness in the longer run


THE Malaysian Economic and Rakyat’s Protection Assistance Package (Permai), which is aimed at assisting and protecting various businesses from going under as a result of the Covid-19 pandemic, is viewed by various quarters as only a short-term reprieve.

Entrepreneurs, particularly in the small and medium enterprise (SME) segment, are of the opinion that the package could be further tweaked to ensure its inclusiveness and effectiveness in the longer run.

The Property Guys Sdn Bhd managing partner Vincent Lim said Permai does not offer any significant solution to his company, CozyHomes, as it comprises only between six and eight staff with salaries ranging from RM2,500 to RM5,000.

To be able to enjoy Permai’s benefit, Lim said employees earning below RM4,000 can be subsidised with the RM600 allocation, provided there are no salary cuts.

“This is exactly the same choice we had to make during the first Movement Control Order (MCO), where we either take advantage of the government support because it is at no cost to us or seek full understanding from the teammates, prolonging our survivability altogether as a company by proposing salary cuts or deferment of payments,” Lim said.

CozyHomes is Malaysia’s first long-term property rental platform for designer homes.

Perhaps, we can see financial institutions come up with Covid-19 loan packages to help boost the economy as a whole, says Lim – pic by TMR FILE

Lim, however, said he wouldn’t blame the government as the package is more like a check and balance effort to help as many citizens as possible.

“The implementation of the Prihatin Special Grant and the distribution of RM1,000 to each SME have to be more stringent to help companies that really need it, especially SMEs that are running on less than RM1,000 per month in expenditure,” Lim said.

Nevertheless, he said the government’s decision to extend the loan moratorium for those in great need is commendable.

“Perhaps here, we can see financial institutions come up with Covid-19 loan packages to help boost the economy as a whole,” he said.

Jae Ko Designs founder Michelle Chu, on the other hand, is optimistic that the package would assist many Malaysians in surviving the pandemic.

“It’s a great initiative to provide SMEs with monetary aid, but I think other forms of government support can also help the SMEs community as the effects of the pandemic will likely last for an extended period of time,” she said.

She said a small company like Jae Ko Designs — a baby fashion brand that specialises in diaper bags and baby accessories — needs more assistance in terms of brand awareness via other initiatives that could be introduced by the government.

“We had a whole year of readymade plans in terms of campaigns, product launching, events and expos, but all these had to be delayed due to the lockdown. We had hopes of expanding into retail stores too, but that plan had to be put on hold,” she said.

RPG Commerce Sdn Bhd CEO and founder Melvin Chee said the Prihatin Special Grant Plus assistance could be expanded to cover half a million SMEs.

“I am pleased to see further support shown to micro entrepreneurs to help boost online businesses. The previous short-term National Economic Recovery Plan’s or Penjana e-commerce campaign helping SMEs jump on the digital bandwagon was a good way to nurture SMEs to adopt e-commerce as the new way of generating income and expand their market reach rather than just waiting for the market to recover on its own,” Chee said.

RPG Commerce, a social e-commerce company established in 2017, now has the largest number of direct-to-consumer brands that are built from scratch.

Chee said while the Wage Subsidy Programme (WSP) 3.0 is going to be beneficial, he personally thinks it could be improved or further enhanced to cover a period of at least three months.

HealthMetrics Sdn Bhd CEO Alvin Yuan said the increase in moratorium and loan instalment reduction has benefitted his company — a digital solutions provider that aims to assist human resources teams in automating, simplifying, and managing healthcare benefits within organisations.

“These efforts will not only help families but also many SMEs that are affected by MCO 2.0, as many of them have just restarted their businesses and some of them have also been badly affected by the recent flood in certain states,” he said.

Yuan, however, said the WSP may not be sustainable as it is only available for one month.

“Since the aid is only available for one month, this might not be sustainable for many companies to move forward from here. Perhaps, if the extensions were to last for at least three months, companies would be able to extend and expand their businesses over a longer period of time,” he said.

Meanwhile, Split CEO and co-founder Dylan Tan said the government’s allocation of RM300 million towards driving e-commerce is a “fantastic initiative” that could accelerate the nation’s transition towards a digital economy.

“Instead of cash handouts, we put money in the hands of everyday Malaysians in the form of digital payments that can only be spent online. I believe this would create a virtuous cycle that stimulates demand online and further incentivise businesses to go digital and compete for a much bigger pie in terms of customers,” he said.

Split is a buy-now-pay-later financial technology provider which allows businesses to offer their customers the choice of paying in up to three interest-free instalments without a credit card.

“In an uncertain time like this, Split is providing a win-win scenario for both Malaysian businesses and consumers so they can shop without anxiety,” Tan said.

EasyStore Commerce Sdn Bhd CEO Frost Chen said the Permai package helps SMEs in short-term financial aid, as it would help them sustain their cashflow for the following months ahead.

As a local multiple sales channel platform designed to offer a simplified, convenient and cost-effective solution for e-commerce merchants, EasyStore offers solutions that help e-commerce sellers pivot their businesses online and digitise their operations.

“Many might not notice that most of these online services, platforms, and sellers are not from Malaysia. While it is not an issue for consumers to support foreign businesses, this will make it tougher for our local SMEs that contribute nearly 40% of Malaysia’s GDP to transform digitally,” he said.

Another e-commerce name that provides a platform for entrepreneurs to run their businesses is Squarelet Sdn Bhd.

Squarelet founder Lasker Saw said the Human Resource Development Fund (HRDF) exemption under the Permai package does not help smaller companies with less than 10 employees which are not registered with HRDF.

“We also feel that the subsidy for wages should be extended as we’re expecting MCO 2.0 to stretch to an additional one to two months, perhaps longer. It is hard for businesses to recover within a month after shutdown — the process will take months and sometimes even years,” Saw said.

To survive the current climate, Squarelet has reprioritised and rushed a couple of upgrades to increase sales virally while simultaneously automating the manual processes in the backend, ensuring businesses are able to fully focus on operations.

Poptron Malaysia Sdn Bhd CEO and founder Brian Johnson Lowe said while the WSP 3.0 is beneficial to many employers, the prolonged MCO calls for a longer-term and more sustainable action plan that can ensure the survival of many businesses.

As for Poptron’s business direction during the pandemic, he said the social commerce lifestyle platform will continue to gather micro and emerging brands in one place.

“Poptron wants to ensure these microbrands are accessible anytime, anywhere, not just in Malaysia but also regionally. With our expansion to South-East Asian countries in the pipeline, beginning with Singapore, these microbrands can grow their business regionally and gain a wider audience,” he said.

Read our earlier report

Permai allocation ‘a little too dismal’