RM4.5 BILLION under five initiatives has been allocated to help small, medium and micro enterprises as part of the government’s Covid-19 economic stimulus package.

Prime Minister Muhyiddin Yassin announced the aid today, which includes raising the allocation for the SME Special Relief Facility fund by RM3 billion.

This brings the fund’s total to RM5 billion, he said in a special televised address today.

The interest rate for the fund will be reduced from 3.75% to 3.5%, he added.

The government will also ease access to financing for SMEs in all economic sectors by increasing the funding facility to RM6.8 billion, by adding another RM1 billion.

Meanwhile, an additional RM500 million will be allocated for the Micro Credit Scheme managed by Bank Simpanan Nasional, bringing the total funds to RM700 million.

The scheme carries a 2% interest rate and requires no collateral.

The terms and conditions will also be relaxed by reducing the operations period for eligible applicants to six months from one year, while the funding facility will be increased to RM75,000 from RM50,000.

The initiative is open to all micro entrepreneurs including nurseries and pre-schools, bus and taxi operators, e-commerce entrepreneurs and the creative industry.

SMEs which have been in operation for less than four years can also benefit from the BizMula-i dan BizWanita-i schemes of up to RM300,000 offered by the Credit Guarantee Corp .

Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will also prepare a RM5 billion guarantee facility and increase the guarantee rate to 80% from 70% for SMEs which are having difficulties in sourcing funds.

Easing cash flow

In announcing the initiatives as part of the RM250 billion economic stimulus package today, Muhyiddin urged financial institutions to support SMEs through these measures as the country tries to mitigate the economic fallout of the Covid-19 pandemic.

“I am also concerned about the fate of company owners who are facing cash flow issues. The government will carry out certain measures to help those who are bogged down by this problem,” he said.

The Employees Provident Fund will also provide consultation services to employers from April 15, which will include the option of delaying, restructuring or rescheduling  contributions.

Employers could recognise a savings of RM10 billion to their cash flow through these measures, Muhyiddin said.

These moves through the EPF could also save some 480,000 affected SMEs and more than 8 million jobs.

SMEs are also allowed to defer the income tax payments for three months starting April 1. This is an extension to the measure which was previously announced for SMEs in the tourism industry.

In addition to that, SMEs in all sectors will be exempted from paying levy contributions to the Human Resource Development Fund for a period of six months from April 2020. 

This is expected to result in a savings of RM440 million in cash flow of companies.

Meanwhile, a moratorium on repayment of loan facilities from government agencies such as Tekun, MARA and co-operatives will come into effect on April1. – March 27, 2020.