The government has strengthened its commitment to support the business sector affected by the global supply crisis and surge in operating costs through various financial initiatives and targeted assistance, especially for small and medium enterprises (SMEs).
Senior Director of Economics and Finance at the Prime Minister's Office, Nurhisham Hussein, announced that two major support facilities have been activated to reduce the financial pressure on local companies.
The mechanism involves the provision of a financing guarantee scheme under the Business Financing Guarantee Company (SJPP) and a special assistance fund worth RM5 billion by Bank Negara Malaysia (BNM).
According to Nurhisham, the scheme under the SJPP is now widely open to affected industries by offering guarantee protection of up to 80 percent for each approved financing.
"This assistance also offers a long financing period, which is between seven to 10 years. This measure also gives companies greater room to stabilize cash flow and continue operations in a challenging economic environment. " he said in a statement.
“Banks are also seen as willing to help and provide easier access to credit to affected companies,” he said in an interview on BFM’s audio broadcast. Nurhisham revealed that so far, more than RM1 billion in loans have reportedly been restructured.
The move is to help companies deal with financial pressure following the increase in raw material costs, diesel costs, and supply chain disruptions.
To ensure more effective monitoring, BNM is currently streamlining the collection of data related to loan restructuring to obtain a more comprehensive picture of the actual level of pressure faced by businesses on the ground.
“Previously, data related to loan restructuring due to the current crisis was not specifically recorded. However, efforts are now being made to ensure more consistent information can be obtained for monitoring and further action,” he explained.
In addition to financing instruments, the government has also instructed relevant agencies to accelerate the distribution of existing aid funds to ensure that SME operations are not disrupted.
Also announced were regional initiatives including a reduction in rental rates for small hawkers and street traders in major cities at the Federal level. State governments are also encouraged to take a similar approach, with Sarawak reportedly having begun implementing it.
Nurhisham explained that the impact of the current crisis was detected to be more concentrated in sectors with high exposure to the petrochemical industry and diesel consumption. Among the most affected sectors were construction, manufacturing, tourism and agriculture.
However, he admitted that there were several gaps in the existing support system that were identified when the crisis occurred, and these are now being improved in stages.
“For example, farmers who previously received fertilizer and seed subsidies were found to still be exposed to increased operating costs of agricultural machinery that uses diesel when carrying out work on the farm.
“The matter is being examined so that the assistance provided is more comprehensive and can truly reduce cost pressures at the operational level,” he said.
He added that the government is also reassessing issues related to licensing and diesel subsidies for commercial vehicles following allegations of imbalances in the implementation of assistance in addition to addressing company cash flow issues due to the sudden increase in global raw material prices.
