SMALL and medium enterprise (SME) bodies welcomed the government’s additional RM10 billion stimulus package to ease cashflow problems, although one cautioned that the aid would not be enough if the movement control order is extended.

SME Association of Malaysia president Michael Kang said the package announced today will help SMEs, especially micro enterprises which have been deprived of revenue in the last few weeks.

As to the effectiveness of the 30% rental rebate, he said the impact can only be known once it is implemented, in reference to tax deductions that will be given to owners of private premises who provide a rebate or waive rental to SME tenants.

The reduction by 25% of the foreign workers levy will also help a little but what SMEs would really prefer is to operate a minimum capacity so some income can be generated, Kang added.

However, he said the measures announced will not be enough should the government decide to extend the MCO, which ends on April 14.

“If the government would want to further lengthen the MCO, it (the aid package) won’t be enough, they may need to reconsider it,” Kang said.

“SMEs are earning no income, and yet costs are going up, he added.

Koong Lin Long, of the Association of the Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) said the RM10 billion showed that the government understands what businesses are going through.

The chambers’ National Council Member cum SMEs Committee Chairman said the RM2.1 billion Prihatin special grant for micro SMEs will help 700,000 out of the 1.8 million small and medium organisations.

He also lauded the government’s move of reducing the interest rate from 2% to 0% for the RM500 million micro credit scheme.

The loan scheme for micro SMEs will also be extended to Tekun Nasional, with a maximum of RM10,000 per company at 0% interest.

“I am happy that this is the first time in Malaysian history there are loans with no interest,” he said when contacted.

The tax deductions for private premises landlords to SME tenants was proposed by the ACCCIM, and Koong is pleased that it has been adopted.

He said while there are SMEs based in shopping complexes in cities, most SMEs operate out of shop lots.

“If I don’t have income, I will still have to pay rental,” he said.

Koong also noted that 30% rebate is quite a sizeable amount.

Prime Minister Muhyiddin Yassin announced the additional RM10 billion as part of the Prihatin economic stimulus package to aid SME and micro organisations mitigate economic challenges due to Covid-19.

This will be in addition to the RM250billion stimulus package announced on March 27.

While financial aid collectively amounting to RM4.5billion was announced under the previous package, many SMEs had found it as insufficient to address their problems. – April 6, 2020.