In his announcement of an enhanced Prihatin Plus (Pakej Prihatin PKS Tambahan) package on Monday, prime minister Muhyiddin Yassin announced that loans for small and medium-sized enterprises (SMEs) under the previous Prihatin Economic Stimulus Package will now be interest free.
SMEs account for more than two-thirds of the workforce in the country and contributes almost 40 percent to the GDP. Therefore, it is crucial for the government to help alleviate the financial burden of SMEs to ensure the sustainability of businesses and jobs in this unprecedented time. According to SME Malaysia, nearly one-third of SMEs only have enough cashflow for March while close to 40 per cent can only sustain up to April.
To further alleviate the burden of SMEs, the government is making several improvements to its relief initiatives. The government has allocated an additional MYR10 billion for the Prihatin Plus package, designed to cushion SMEs from the impact of the COVID-19 outbreak.
Firstly, it is abolishing the two per cent interest rate to zero per cent for the MYR500 million Micro Credit Scheme offered under Bank Simpanan Nasional (BSN).
Secondly, the microloan scheme for micro-SMEs is now extended to Tekun Nasional with a maximum loan limit of MYR10,000 per company. This is also offered at zero interest rate. The government has allocated MYR200 million for this scheme.
That aside, the government has established a special Prihatin grant (Geran Khas Prihatin) worth MYR2.1 billion for all eligible micro-SMEs. The special grant worth MYR3,000 will be distributed to each micro-SME. Around 700,000 micro-SMEs stand to benefit from this initiative.
To qualify for the grant, micro-SMEs must be registered with the Inland Revenue Board (IRB).
The expanded stimulus package also saw the government pump up allocation for the salary subsidy programme from MYR5.9 billion to MYR13.8 billion. Read more about the new salary subsidies here.
Additionally, the government will offer tax deductions to landlords who waive or reduce rent for SMEs by at least 30 per cent. It is hope that the measure would encourage property owners to emulate the government’s move to waive rent at premises owned directly or via government-linked companies (GLCs).
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