KUALA LUMPUR: The government has stepped up efforts to ensure liquidity for small- and medium-scale enterprises (SMEs) through the addi-tional RM10 billion stimulus, economists said.
They said the additional RM10 billion would help SMEs, especially those categorised as micro-sized, with tight cash flow due to zero or minimal sales revenue due to the Covid-19 pandemic.
Putra Business School business development manager Associate Professor Dr Ahmed Razman Abdul Latiff said the wage subsidy had now been increased under the latest stimulus package.
The subsidy depended on the number of people employed by a company, taking into consideration that smaller businesses might be struggling more during this time of crisis.
Hence, Razman said, additional support in the form of a special grant of RM3,000 for micro-sized enterprises was seen as a good relief as well.
“All this support will ensure that SMEs continue to retain their workers employed for the next six months and to avoid them from becoming bankrupt,” he said when commenting on the additional RM10 billion stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin yesterday.
“Of course, this relief is meant especially for SMEs who could not run their businesses during the Movement Control Order (MCO).
“This additional package will indeed help increase the gross domestic product (GDP) by a couple of percentage points as most of the cash relief will definitely be spent by the workers and the businesses in the next few months.”
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the government had done its best to ensure that employees in the SME sector would continue to be retained, while keeping cash flow and access to low financing for the businesses.
“What matters now is to ensure that all this financial assistance reaches its targeted group in a timely manner.
“For SMEs which have yet to register with the authorities, such as the Companies Commission of Malaysia and Inland Revenue Board, perhaps this is the best time to do so.
“Their businesses can become legitimate and it can improve their chance of accessing financing or financial assistance,” said Afzanizam.
CGS-CIMB said the additional stimulus package to SMEs would not have any impact on its GDP growth forecast of -2.3 per cent in 2020.
“Today’s stimulus brings the fiscal injection to RM35 billion, which was our expectation prior to (the announcement of the) third stimulus package,” it said.
Malay Economic Action Council (MTEM) chief executive officer Ahmad Yazid Othman said the additional RM2.1 billion in grants for micro businesses and abolishment of interest for the SME Micro Financing scheme of up to RM10,000 would soften the impact of the MCO on SMEs.
Yazid said the increase in wage subsidy from RM5.9 billion to RM13.8 billion would help SMEs survive or start trading after having been out of business for more than a month.
“MTEM hopes that SMEs will follow the government’s advice as Malaysians are committed to helping the government fight the outbreak,” he said