Business groups praise budget but want lower bar for getting loans
BUDGET 2022 | The business community has raised concern over a RM40 billion financing scheme under Budget 2022 that may not be available to small and medium enterprises (SMEs).
While lauding the budget tabled by Finance Minister Tengku Zafrul Abdul Aziz as the largest budget in history for the business community and other sectors, business groups want the government to ensure that SMEs can access the loan.
This is particularly after they observed how loan applications by entrepreneurs were...
BUDGET 2022 | The business community has raised concern over a RM40 billion financing scheme under Budget 2022 that may not be available to small and medium enterprises (SMEs).
While lauding the budget tabled by Finance Minister Tengku Zafrul Abdul Aziz as the largest budget in history for the business community and other sectors, business groups want the government to ensure that SMEs can access the loan.
This is particularly after they observed how loan applications by entrepreneurs were turned down by banks in the past two years even after the government announced stimulus packages to help the people, including businesses impacted by the economic fallout of the Covid-19 pandemic.
Speaking with Malaysiakini, SME Association of Malaysia president Michael Kang noted that the RM40 billion financing scheme dubbed SemarakNiaga will be allocated for SMEs and public listed companies.
"What is important is the implementation on the ground, we want the banks to reduce red tape in the process of the loan application so that eligible borrowers can get their loan soon," he said.
He pointed out that some of the banks still implement strict financing conditions for SMEs despite more and more businesses reopening after the country was placed under the National Recovery Plan (NRP).
"For instance, some banks still barred tourism industry players, among others, from getting their loan. There were about 20 restrictions set by banks that we brought up to the Finance Ministry during the dialogue session prior to the budget," he said.
Kang hoped that the financing scheme will benefit 55 percent out of 1.2 million SMEs who face cash flow issues. The balance of 45 percent has sufficient liquidity in running their businesses.
"I think the budget allocation is enough to cater for the SMEs in need as what they need is only three to six months operational cost to make a comeback," he added.
Relax loan requirements
Malay Chamber of Commerce Malaysia (DPMM) president Abdul Halim Husin also recalled how SMEs were turned down by the banks when they applied for financing loans.
"Many micro-entrepreneurs were reported to the Central Credit Reference Information System (CCRIS) for failing to repay their existing loan due to business closure during the lockdown, thus, they were not eligible to get fresh loans too," he said.
Such requirements should be relaxed so that those who are really in need of financial loans can restart their business after getting a business capital injection, he added.
"Apart from that, the bank also requires the borrowers to submit their business projection with steady annual revenue increment above 10 percent.
"For a restaurant operator, how can one get such revenue increase when you are expected to adhere to social distancing measures and the premises can only run at half of the usual capacity?" asked Halim.
"The government should engage private banks for the purpose. This was what we told the government last year but Bank Negara declined to do so," he added.
