KUALA LUMPUR: MANY businesses, in particular small- and medium-scale enterprises (SMEs) and micro-enterprises, have been severely impacted during the Movement Control Order (MCO).
Having closed for almost two months, businesses faced cash-flow challenges with having to pay salaries and premise rentals without a recurring income.
The government had stepped in to support affected businesses under the Prihatin Economic Stimulus Package through a raft of measures aimed at saving jobs and easing cash flow.
This include the Wage Subsidy Programme, waivers for rental of business premises, as well as facilities, such as the Special Relief Facility (SRF) and various micro-credit schemes.
During the MCO, which began on March 18, the government said about 66 per cent of businesses experienced a drastic drop in demand, which made it hard for them to sustain operations.
On the flipside, e-commerce became the preferred medium, compared with brick-and-mortar premises. However, about 25 per cent of businesses lacked the e-commerce infrastructure to jump on the bandwagon amid the growing appetite of online shopping.
On Friday, the National Economic Recovery Plan, or Penjana, with a total allocation of RM35 billion for 40 initiatives via three thrusts, empowering the people, propelling businesses, and stimulating the economy, was announced.
Under Penjana, measures will be introduced to allow workers and businesses to sustain operations and enhance productivity. Support will be given to social enterprises to diversify economic activity.
Targeted assistance will be put in place to regenerate affected economic sectors, while initiatives to increase consumer confidence and consumption will be launched
KPMG Malaysia tax head Tai Lai Kok said introducing Penjana was the right move as it emphasised the acceleration of the economic recovery as SMEs and micro-businesses were the backbone of the economy.
"The various digitalisation and financing initiatives for SMEs and micro-businesses, such as the training and support under the e-commerce campaign, grants and loans for the adoption of digitalisation services, as well as the Penjana SME Financing and microfinancing programmes, will help businesses recover faster and quickly adapt to the new normal," he said.
He said the three-month wage subsidy extension would also provide cash flow support critical to sustaining these businesses.
Funding Societies lauded the government's digital and SMEs-focused economic recovery plan.
"We welcome the announced initiatives, such as Dana Penjana Nasional, Penjana SME Financing, Penjana Microfinancing and Bumiputera Relief Financing, in providing more accessibility to financing for impacted SMEs," said Funding Societies Malaysia co-founder and chief executive officer Wong Kah Meng.
He said the government had placed importance in driving the nation's economic recovery through business digitalisation efforts.