Budget 2015 and SME Funds
Raising enough money for start-up and the initial operating costs can be difficult. Many would be entreprenuers are constantly looking for funding and support to help transform their ideas from mere imaginings to actual and commercially viable products and ventures. Therefore, the 2015 Budget has been very encouraging for SMEs, entrepreneurs and start-up companies to receive financial support and financing.
The 2015 Budget introduced a multiringgit SME Investment Partner programme specially created for start-up loans, business accelerator programmes and various other incentives to support Small and Medium Size (SMEs) and entrepreneurship development.
Under this programme, RM375 million would be provided for five years in the form of loans, equity or both, particularly at the start-up stage. From the RM375 million, RM250 million will be coming from the SME Bank and RM125 million from private investors and another RM10 million will be allocated for the Business Accelerator Programme under SME Corp.
To assist budding innovators and aspiring entrepreneurs transform their innovative technology ideas into commercially-viable ventures, another RM80 million would be allocated for a soft loan scheme for automation and modernisation. The Accelerated Capital Allowance which lowers the cost of information and communications technology (ICT) equipment and software will help SME remain competitive and grow their businesses.
Tekun, the agency under the Ministry of Entrepreneurial and Cooperative Development to provide simple and quick financing facilities to Bumiputeras businesses, will provide RM350 million to Bumiputera entrepreneurs. Indian entrepreneurs, young professional women and armed forces veteran entrepreneurs development programme will also receive RM50 million each.
To assist SME entrepreneurs from the Chinese community, the government would provide soft loans totalling RM50 million and RM30 million for hawkers and petty traders, respectively.
SMEs are the backbone of the Malaysian economy, accounting for more than 90 per cent of all businesses in the manufacturing, services and the agricultural sector, and providing for 65 per cent of total employment. Currently, the sector contribute 33 per cent to gross domestic product and the share is targeted to increase to 41 per cent by 2020. The government assistance is necessary to ensure that SMEs are not adversely affected by the ongoing policy reforms such as the Goods and Services Tax, which will come into effect April, 2015.
October 11, 2014 / /
Categories: loan news