OBTAINING adequate credit has been the bane of those wishing to be self-employed, both in big and small ways. Normally, financial institutions are forthcoming when an enterprise is already well on the way to success and able to service loans. For the start-ups, however, just an idea is never good enough when only a business plan — no matter how feasible — is all there is to persuade a bank with. The consequence is obvious. It stunts the ambition of many an aspiring entrepreneur. For the economy it could easily mean that a business talent with the much needed acumen is lost. Irrespective of whether the intention is to stay small or to expand, opportunities are now being presented to the willing. These came with two recent announcements.
Firstly, a RM200 million fund for women, the Women Entrepreneur Financing Programme, was launched by the SME Bank last Thursday, tailored to the woman entrepreneur. However, unlike the average bank loan where the demand is for nothing short of success, the SME Bank’s policy is to help a good idea to fruition and then through to success. In the past, the bank has been criticised for its unrealistically high level of non-performing loans — which has been reduced substantially over the last five years — but it is a necessary consequence of its lending policy: to help grow small and medium enterprises (SME) to sustainability. Towards this end, it has a Centre for Entrepreneur Development and Research to provide capacity building to its successful borrowers who want to expand their businesses. They, in turn, are obliged to participate in the training given.
Secondly, the prime minister’s announcement on the same day of a micro credit scheme with an allocation of RM30 million for Chinese hawkers and petty traders. They make up 27 per cent of the number nationwide. An innovation waiting to happen, given the impossibility of this low-income economic group to access loans from established lending institutions, Chinese micro enterprises need no longer depend on loan sharks for their start-up capital. For a group that is willing to risk life and limb to earn an honest income through hard graft, they have long needed a leg up from the government. Often forgotten in the past because they are a part of a generally well-to-do ethnic community, the low-income Chinese traders can now look forward to a brighter future.
The expectations of these two particular groups are easily predicted now that the way forward has been promised. Why promised? Because there is a tendency for programmes announced not to be implemented to its full potential. Bureaucratic mismanagement often thwarts Putrajaya’s best intentions with choking red tape. Simple procedures intended to facilitate must be implemented. Indeed, the SME Bank insists that it adheres to similar standards used by other banks when identifying its prospective clients. But will this not foil their objective? As for the micro entrepreneur, a strong recommendation from the local headman should suffice.