RM700 million SMEs grants inadequate, says Kho

SUPP Women chief Kho Teck Wan

KUCHING, June 7: The RM700 million worth of grants and loans announced by Prime Minister Tan Sri Muhyiddin Yassin for small and medium enterprises (SMEs) to finance digital transformation is inadequate, opined Sarawak United Peoples’ Party (SUPP) Women chief Kho Teck Wan.

She said that out of the RM700 million, RM500 million is in the form of soft loan for SMEs to adopt technological transformations, and 98.5 per cent of business establishments in Malaysia is SMEs, which is translated to about 900,000 business establishments.

“Based on these figures, RM500 million is a very small allocation, and in my honest opinion not enough to make a difference. Of course not all SMEs will adopt technology transformation, however, if only 20 per cent of the SMEs applied for such loan, with equal distribution of loan, each will only get a little over RM2,500,” she said in a press statement today.

Kho noted that according to the survey done by the SME Corporation Malaysia (SME Corp), if without operation, most SMEs in Malaysia have the cash flow to withstand business for less than three months.

She said less than one per cent can sustain for one year if without operation, and with this figure, most SMEs either have inadequate funding or fear to adopt technology transformation, even if they wish to do so.

“SMEs contributed to over one-third of Malaysia’s gross domestic product, but provide 65 per cent of employment in Malaysia and it is therefore very important for the government to ensure the survivability and sustainability of SMEs. When SMEs failed, majority of Malaysians will lost their employment,” she added.

Kho also pointed that she had received many feedback from the SMEs that they failed to option the special interest loan from the commercial banks.

“I am glad to see the initiative to provide free technical training to SMEs were announced, however, the government needs to seriously consider increasing the loans and grants not only for technology adoption, but help the SMEs to get through this tough time.

“I truly understand that the journey of economy recovery during the Covid-19 pandemic is tough not only for SMEs but the government as well.

“In fact Malaysia is not the only country facing economy recovery challenges, and I do hope with the statistics, the government can focus the economy’s recovery efforts on SMEs survivability. When SMEs survive, the economy will survive,” she said.

Meanwhile, Kho also called for the relevant authority to address the the logistic issues in ensuring for a successful e-commerce activity in the country.

She said that while actively pushing for e-commerce activities and adoptions with special incentives, the government needs to ensure the logistics and delivery sectors are ready for the increase demand in shipping and delivery.

“E-commerce and logistics work hand-in-hand. Without a fast and efficient logistics and delivery system, e-commerce activity will not be successful,” she said. –DayakDaily.