By HIDAYATH HISHAM / Pic by TMR FILE PHOTO

The government in Budget 2024 reaffirms its focus on economic reform and people empowerment. 

A key highlight is the continued support for micro, small and medium entrepreneurs (MSMEs) under the Madani Economic Framework.

The budget outlines several measures to increase access to financing and loans for MSMEs amounting to a total of RM44 billion. 

This includes microloans from agencies like Bank Negara Malaysia (BNM), Bank Simpanan Nasional (BSN), and Tekun Nasional.

Specifically, RM1.4 billion was allocated under BSN microloans to provide capital for hawkers and small businesses, while RM330 million under Tekun is for financing batik craft operators, Orang Asli entrepreneurs, and Bumiputera businesses.  

Additionally, RM30 million under Tekun is dedicated to financing businesses run by the Indian community, underscoring the government’s commitment to uplift marginalised groups.

To encourage women and youth entrepreneurs, RM720 million was set aside from the total fund. 

BNM will also provide RM8 billion in loans to support SMEs, including RM600 million to help micro-enterprises, low-income entrepreneurs, small contractors, and food security sectors.

Other initiatives include RM600 million under the National Treasury Impact Fund to promote growth in rural and semi-urban areas, as well as loan guarantees of up to 80% for SMEs in green, tech and halal sectors via Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP).

For increasing competitiveness of MSMEs, the budget introduced digitisation grants up to RM5,000 for over 20,000 MSMEs. 

This is to help them upgrade to digital sales, inventory and accounting systems. The government will also intensify efforts to encourage technology adoption and digitisation among MSMEs.

HRD Corp has been entrusted to continue driving upskilling efforts for Malaysian talents and workforce through the HRD levy and the Latihan Madani special fund.

Its chief executive Datuk Shahul Dawood said these initiatives are at the cornerstone of HRD Corp’s vision to ensure that every Malaysian is trained and employable.

“We will continue to create more skills development and capacity-building programmes for the Malaysian workforce geared towards digitalisation, Technical and Vocational Education and Training (TVET) and future work skills.

“A dynamic and highly skilled workforce and talent pool are crucial for Malaysia’s aspiration of becoming a developed country. By democratising access to learning and development and ensuring no one is left behind, we are confident that the government will achieve its goal of creating a 35% skilled workforce by 2030,” he said in a statement. 

On the same note, CIMB Group CEO Datuk Abdul Rahman Ahmad said the bank is pleased to see the continued focus on driving sustainable economic growth through the budget.

“We welcome measures to support MSMEs and startups, including RM2.2 billion in funding for automation, digitalisation, and expanding footprint. This will bolster business growth and resilience.

“We support efforts to drive active market participation and equitable wealth distribution through value-based intermediation. We welcome the commitment to combat financial scams by doubling the NSRC allocation to RM20 million,” he said in a statement.

Similarly Malaysia Employers’ Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said MEF welcomes the special fund allocation for Latihan Madani through the 15% of unutilised HRD levy.

“It is essential that we work together to ensure the success of the Latihan Madani initiative by supporting employees within SMEs and talents within underserved communities.

“The special funds will help SME employers in expanding training opportunities to more of their employees, enabling them to retain skilled workers and attract and nurture new ones for their growth and development goals,” he said.

On the contrary, Small and Medium Enterprises Association (Samenta) national president Datuk William Ng said its members are surprised and disappointed with the introduction of the capital gain tax without any consultation.

“It is painful to see full-timeshare punters exempted from any tax, while hardworking SMEs will be taxed upon retirement, sales or bringing investors,” he said.  

He acknowledged that Malaysia is one of the last in Asia without a capital gains tax, and it can increase revenue and reduce debt. However, he said this must not be at the expense of entrepreneurship and SMEs.

“If a wealth tax is needed to avoid GST, an inheritance or windfall tax would be better than a blanket capital gains tax that disproportionately hurts SMEs,” he added.

Nevertheless, Samenta chairman Christopher Ng said as the voice of SMEs and MSMEs, it is very pleased with the Latihan Madani special fund announcement, where HRD Corp will allocate training and development funds for SMEs and underserved communities.

He elaborated that at over 97% of all Malaysian businesses, SMEs are the backbone of the nation’s economy. 

“Most SMEs realise the need to train and upskill their employees but are unable to do so due to limited funds and resources. Hence Latihan Madani is a very much-needed intervention to help SMEs raise their game to add value, increase productivity and strengthen resiliency,” he said.

On the other hand, Malaysian Associated Indian Chambers of Commerce and Industry (Maicci) president Datuk Seri N Gobalakrishnan believed that Budget 2024 holds the potential to bring about transformative change and unlock new opportunities for Malaysian talents and industry players. 

“We eagerly anticipate the active participation of all our members in championing the cause, as their involvement will undoubtedly be a driving force behind the success of this noble undertaking,” he said.

Meanwhile, Training Providers Association of Malaysia (TPAM) chairman Netty E. Komattu hoped the Latihan Madani initiative can gain traction through partnerships between accredited trainers, SMEs and the underserved.

“Ensuring that these trainings are recognised and accredited in their respective fields is crucial. This will empower both the SMEs and underserved communities to grow, both personally and professionally,” she said.