‘Semarak Niaga' to aid businesses struggling from pandemic
SHAH ALAM - The government has launched an initiative under a programme called "Semarak Niaga Keluarga Malaysia" to help businesses in the country recover following the Covid-19 pandemic.
Prime Minister Datuk Seri Ismail Sabri Yaakob said the programme with a value of RM40 billion allocated through Budget 2022 aims at restoring the capability and ensuring the viability of businesses.
In an interview, Ismail Sabri speaks more about the programme and how it could help the country’s economic recovery.
Q: Can you elaborate more on the Semarak Niaga Keluarga Malaysia Programme?
A: The Semarak Niaga Keluarga Malaysia Programme (Semarak Niaga) is the government's commitment to help businesses recover, as well as regain their capabilities and competitiveness following the Covid-19 pandemic, particularly for micro, small and medium enterprises (MSMEs). A total of RM40 billion has been allocated through Budget 2022, which includes various forms of financing, including equity injections.
This initiative also reflects the spirit of Keluarga Malaysia, with measures that are open to the entire business community, from micro-enterprises to publicly listed companies. However, we know that it is the MSMEs that are most impacted by the Covid-19 pandemic and they must be supported, whether it is through financing schemes such as direct loans or matching grants, to empower them to restart their business.
Under Semarak Niaga, we also have RM22 billion worth of guarantee by Syarikat Jaminan Pembiayaan Perniagaan (SJPP), including RM2 billion specifically for Bumiputera. This makes it easier for SMEs to apply for new financing that may otherwise be difficult to obtain.
Q: How can the programme help the country's economic recovery efforts?
A: Through Semarak Niaga, we want to ensure that the country is on a strong economic recovery path. The Covid-19 pandemic which has led to uncertainties in the economy is still impacting the entire business community. Thousands of businesses were forced to close. Most certainly, they will find it difficult to restart their business or continue operations, particularly if they have a large amount of debt or liabilities.
Hence, Semarak Niaga not only supports businesses by providing working capital injections or financing, but also through equity injections or taking up shares or an equity stake in a company for businesses affected by the Covid-19 pandemic. Taking up equity stake is a novel and innovative solution that has never been implemented before. The government is confident that this initiative will help the entrepreneurs to recover and move forward.
By providing assistance and support to the business community, as companies recover and grow, we are also creating more job opportunities while also restoring the livelihoods of Keluarga Malaysia. This will reduce the unemployment rate, which the government targets to be less than 4 per cent by the year end. In fact, we are already building on past achievements: the Department of Statistics Malaysia (DoSM) and Bank Negara recently announced that the Malaysian economy grew by 3.1 per cent in 2021, compared to a 5.6 per cent contraction in 2020. Therefore, the government is confident that job creation and business empowerment efforts through Budget 2022 will contribute to this year’s projected GDP growth of 5.5 to 6.5 per cent.
Q: Can you provide a breakdown of the over RM40 billion allocated for the Semarak Niaga programme?
A: The allocation of more than RM40 billion for this in Budget 2022 consists of RM1.8 billion in Micro Credit Loans; RM2.2 billion in Equity/Alternative Financing; RM14.2 billion in SME Soft Loans; and RM22.0 billion in guarantees through Syarikat Jaminan Pembiayaan Perniagaan (SJPP).
As mentioned, all levels of businesses, from micro/small to large and listed on Bursa, can benefit from measures in the initiative. In fact, for MSMEs, the government had never before provided such a sizeable RM1.8 billion-funding with a moratorium feature of up to 12 months.
Q: What role can agencies in Malaysia play in ensuring the success of the initiative?
A: Government agencies, private sector, NGOs, government-linked companies (GLCs) and government-linked investment companies (GLICs) should collaborate with the government to help execute the initiative for the well-being of Keluarga (Perniagaan) Malaysia. Such collaboration will create various job opportunities to assist the people in rebuilding their lives, provide support to affected businesses, and strengthen the country’s social protection system.
Overall, the government is confident that this initiative will contribute to Keluarga Malaysia’s recovery and the country's socio-economic development in a more balanced, inclusive and sustainable manner.
Q: What are the overarching objectives of the programme?
A: The first objective is to maintain the recovery momentum that we achieved throughout the fourth quarter of 2021. The government, through the relevant agencies, has crafted alternative financing and financing schemes for MSMEs and other affected businesses, allowing them to recover and generate revenue once more. This includes initiatives to help most impacted sectors such as tourism, retail and entertainment.
The second objective is to build business resilience, which includes helping them develop their workers’ skills. This is also related to the JaminKerja initiative, which I launched on Feb 19. The third objective is to enable reforms that will help the country transition towards an economy that is sustainable, as well as enabled by Digital Transformation and IR4.0. Efforts towards digital enablement include grants for SME digitalisation and smart automation, matching grants to accelerate digital transformation, as well as assistance for the gig economy players and start-ups to better navigate the world of commerce and business.
I would also like to highlight that Semarak Niaga is also complemented by other Budget 2022 initiatives, particularly those aimed at facilitating business. This includes preparing businesses for post-Covid-19 operational requirements. For example, the government will extend the tax deduction for renovation costs of up to RM300,000 to support SOP compliance, such as improving the ventilation system; and provide additional tax deduction of up to RM50,000 on employee housing rental expenses.
Budget 2022 will also focus on strengthening the country's position as a competitive investment destination. This includes promoting more strategic investments. For example, we have a special strategic investment fund to attract foreign investment from multinational companies (RM2 billion), Smart Automation matching grants for 200 manufacturing and service companies (RM100 million), and skills/training programmes to train 20,000 workers to support specific industry clusters (RM80 million).
Q: How can MSMEs obtain the schemes offered under the Semarak Niaga Keluarga Malaysia Programme?
A: I encourage the business community to seize these opportunities to help them recover and get back on their feet, which, in turn will support the country's socio-economic recovery efforts.
Entrepreneurs and business owners are encouraged to visit the Budget 2022 portal, https://budget.mof.gov.my/manfaat/. This interactive portal provides various information on the schemes and benefits available under Semarak Niaga.
Moving forward, the government remains committed to help businesses recover, as well as improve their resilience and competitiveness, particularly for the MSMEs.
