AN RM3 billion fund was launched today to provide loans with an interest subsidy of 2% for all Malaysian companies interested to digitalise their businesses.

Finance Minister Lim Guan Eng launched the fund this morning.

It will be managed by Bank Pembangunan Malaysia, which will collaborate with the Malaysian Digital Economy Corporation to vet all applications and ensure that the loans are channelled to the right sector for the right technology.

The fund, dubbed the Industry Digitalisation Transformation Fund, was first announced in Budget 2019 to push Malaysia towards Industry 4.0 by encouraging the adoption of new technology related to robotics, big data and artificial intelligence.

Borrowers enjoy an interest subsidy of 2% per annum if they upgrade their production technology.

Bank Pembangunan will offer the loan among its existing products, in line with its credit underwriting standards and guidelines.  

“The policy aims to raise our labour productivity growth, increase manufacturing gross domestic product (GDP) contribution, enhance innovation capacity and create more high-skilled jobs,” Lim said during the launch in Kuala Lumpur.

Present was Bank Pembangunan chairman Zaiton Mohd Hassan.

The government hopes to raise manufacturing productivity by 30% from RM107,000 per person in 2016 to RM139,000 in 2025, he said.

The government also wants to increase manufacturing’s contribution to the economy to RM392 billion in 2025 from RM254 billion in 2016.

Putrajaya also aims to improve Malaysia’s Global Innovation Index ranking from 35th place into the top 30 and increase the share of high-skilled workers in the manufacturing sector from 18% to 35%.

Zaiton, appointed as bank chairman last month, said the fund can be used to part finance the acquisition or development of specific assets, including software, licences and patents, as well as digital technology projects or contracts.

“Some of the targeted technologies include the like of artificial intelligence, robotics and automation. We may also finance companies which construct related infrastructure for the adoption of technology,” she said.

In Budget 2019, the ministry entrusted Bank Pembangunan with three separate funds totalling RM4.5 billion, including the Industry Digitalisation Transformation Fund.

Last month, Lim launched a RM2 billion scheme to assist SMEs to obtain funding to modernise. – March 7, 2019.