PETALING JAYA, July 22: Two organisations of small and medium-sized enterprises (SME) have complained that government initiatives to get their members back on track are not reaching intended targets.

SME Association of Malaysia president Michael Kang spoke of the reluctance of banks to disburse funds and Samenta (Small and Medium Enterprises Association Malaysia) secretary Yeoh Seng Hooi said many companies had yet to receive the funds approved for them under the Special Relief Facility (SRF).

Kang told FMT a lot of SMEs had been complaining of difficulties in getting financial assistance since banks had not been approving loans to companies without good credit ratings or strong financial positions.

Noting that most businesses resumed operations only last month, he said they would need at least six months to recover from the decrease in revenues during the lockdown imposed to stop the spread of Covid-19.

“If they cannot bounce back, they will be facing a lot of issues by the time the moratorium on loan repayments is up in October,” he said.

“I hope banks can step in and help SMEs that are not financially strong or don’t have good ratings. At least, with a small loan, they will have some cash to roll.

“With no income for the last three months, they need cash to start up and reactivate their businesses and maintain employment.”

Yeoh said the SRF didn’t seem to be serving its purpose since SMEs appeared unable to get access to funds.

“Many companies have received approval for the SRF, but haven’t got the drawdown yet,” he said.

“The delay beats me. If the loan is guaranteed by the CGC (Credit Guarantee Corporation) and if all the documentation is in place, just quickly sort it out and expedite the drawdown.”

With a maximum tenure of up to 5.5 years and a financing rate of 3.5%, the SRF provides financing of up to RM1 million and a CGC guarantee of coverage of up to 80%.

Channelled through 18 banks, the RM5 billion SRF has been expanded to RM10 billion due to overwhelming demand from SMEs. Bank Negara estimates that the programme has benefited 21,000 SMEs, a far cry from the estimated 200,000 SMEs which qualify for the scheme.

Yeoh also touched on initiatives to maintain employment such as the monthly Wage Subsidy Programme (WSP), a scheme by the Social Security Organisation for Malaysians earning less than RM4,000 a month.

Under the WSP, companies that employ more than 200 people can receive RM600 per retained worker, those employing between 75 and 200 employees can get RM800 and those with fewer than 75 employees are eligible for RM1,200.

Yeoh said funds under the scheme also needed to be disbursed as quickly as possible since they play a key role in helping companies stay afloat.

“Sometimes all these things look good on paper, but the execution always faces issues,” he said.

Finance Minister Tengku Zafrul Abdul Aziz said last week that the government had approved RM7.79 billion for more than 2.53 million employees under the WSP. Total disbursement stood at RM6.82 billion, benefiting 2.49 million people.

SMEs provide employment to more than four million workers in Malaysia and account for about a third of the nation’s gross domestic product.


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