Hooray! RM50 million to help grow SMEs … but will implementation of fund be productive and effective?

SME Corporation Malaysia (SME Corp. Malaysia) is a Central Coordinating Agency under the Ministry of International Trade and Industry Malaysia that formulates overall policies and strategies for Small and Medium Enterprises (SMEs) and coordinates the implementation of SME development programmes across all related Ministries and Agencies. It acts as the central point of reference for research and data dissemination on SMEs, as well as, provides advisory services for SMEs in Malaysia... for more, go to http://www.smecorp.gov.my/index.php/en/

Hooray! RM50 million to help grow SMEs … but will implementation of fund be productive and effective?

The Star Online’s Nov 6, 2017, report titled “Government to set up RM50m fund for SMEs” sure makes a good read, at least for small and medium-scale entrepreneurs.

What is in doubt is the efficient and productive implementation of the fund.

“Malaysians are no doubt sceptical of the government’s implementation record, as depicted by the Auditor-General’s annual report that’s tabled in Parliament,” Gerakan Deputy Speaker Syed Abdul Razak Alsagoff said.

He said the setting up of the fund was “most welcome and timely” but implementation must be tight to ensure success.

“Tight means the funds must only be released to those who have strong business and investment fundamentals. Those who have solid track records of success and achievements.

“Can this be assured? As long as the funds are not released only to cronies with strong cables, success is in the air,” he added.


https://smeam.org/

Syed Razak, who is Gerakan’s nominee to contest N.37 Bukit Lanjan in the coming 14th General Election (GE14), said the fund would be meaningless and ineffective to contribute anything to nation-building “if track record is not the top priority for those eligible to receive the needed funds”.

He said Malaysians had read too much of how those who had received loan-aids either folding up their operations or failing to repay loans.

“So, what is so great of the RM50 million SME fund if it is ‘business as usual’? What is so different this time?”

Here’s what national news agency Bernama reported and posted by The Star Online:

"Government to set up RM50m fund for SMEs
SME
Monday, 6 Nov 2017
1:40 PM MYT

Second Finance Minister Datuk Seri Johari Abdul Ghani 

KUALA LUMPUR: The government will set up a co-investment fund (CIF) totalling RM50mil from existing grants to be invested in the small and medium enterprises (SMEs) together with the private investors through equity crowdfunding (ECF) and peer-to-peer (P2P) platforms.

Second Finance Minister, Datuk Seri Johari Abdul Ghani, said the Securities Commission (SC) would assist in establishing the fund including deciding on the co-investment criteria for equity and debt financing.

"The platforms (ECF dan P2P) are very important for the SME ecosystem as it provide the opportunities for the SMEs to expand their business," he said to reporters after launching SCxSC Digital Finance Conference 2017 on Monday.

He said the government through SME Corporation Malaysia would utilise these platforms in giving out the grants to the SMEs.

Earlier in his keynote address, Johari said through the CIF, the government was hoping to provide efficient mechanism for shared partnership and responsibility with Malaysian investors to co-invest and grow the SMEs.

He said for investors, the "democratisation" of funding would strengthen the investor base among retail investors.

"With the availability of the right products and platforms, retail investors can now participate easily in investment activities and stand to gain from their ventures," he said.

He said for investors who viewed investing as a powerful tool to drive sustainable and inclusive agenda, participation in investment activities would enable this class of investors to be directly involved in making impactful changes through sustainable investment options.

Johari said with the growing Internet penetration as well as the availability of various alternative financing platforms, investing activities were no longer exclusive for “accredited investors” but more accessible to the masses.

He said the development must be welcomed and the benefits of the democratisation of investments were indeed multi-pronged.

"For small businesses and start-ups, democratisation of investments means that they have higher chances to secure funding, and more often than not, at a more affordable cost," he said.

He said apart from ECF and P2P, the government was also encouraging the growth venture capital industry. "Because these three are part of the ecosystem that we need to create in order to take the risk out from banking sector," he added.- Bernama"

N.37 LET BUKIT LANJAN SOAR WITH SYED ABDUL RAZAK ALSAGOFF