Budget 2022: More Assistance for SMEs and Individuals
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According to Bank Negara Malaysia (BNM), an additional RM4.5 billion would be allocated as part of the increased support for small and medium enterprises (SMEs) and individuals under Budget 2022.
Increased funding in financial assistance
The central bank stated that it would include an additional RM20 million for iTEKAD to help low-income microenterprises. The Perlindungan Tenang Voucher (PTV) programme for qualified B40 recipients will also continue in 2022.
The Targeted Relief and Recovery Facility would receive RM2 billion of the additional RM4.5 billion provided under BNM's Fund for SMEs, bringing the total allocation to RM8 billion.
The Agrofood Facility's entire allocation would be increased by RM500 million, bringing it to RM2 billion.
BNM will also grant BNM RM20 million to low-income micro-entrepreneurs through iTEKAD, a blended social finance initiative run by Islamic banks that provides seed capital, microfinancing, and structured training to micro-entrepreneurs in partnership with implementation partners.
According to BNM, the government has decided to contribute RM20 million to boost the seed capital of the programme to extend the initiative further and enable wider participation from financial institutions.
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Aside from continuing the PTV programme in 2022, BNM also announced that the voucher value would be increased from RM50 to RM75.
Under this initiative, qualified B40 users will be given vouchers to purchase Perlindungan Tenang products from insurers and takaful operators. Perlindungan Tenang products are basic insurance or takaful plans that are simple and affordable.
The government would also extend stamp duty exemption to insurance and takaful products with annual premiums or contributions of less than RM150 for individuals and RM250 for micro-SMEs.
"These reforms, taken together, will provide Malaysians with more inexpensive protection coverage," it added.
New facilities by BNM
From January 2022, BNM will make two new facilities available:
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The Business Recapitalisation Facility (BRF), and
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The Low Carbon Transition Facility (LCTF).
The central bank stated that the RM1 billion BRF would be established to help businesses strengthen their capital structures and seek financing while better managing their indebtedness levels to be more sustainable.
It stated that under the BRF, SMEs could acquire financing in the form of equity or equity-like instruments, or debt financing combined with equity in partnership with third-party equity financiers (blended finance).
The RM1 billion LCTF would be formed on a matching basis by participating financial institutions to assist SMEs in adopting sustainable and low-carbon business practices.
The central bank said the LCTF includes increasing the use of sustainable raw materials and renewable energy, as well as improving building or machinery energy efficiency.
Source: The Edge Markets
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