KUALA LUMPUR: The Entrepreneur Development and Cooperatives Ministry (MEDAC) will propose the introduction of incentives such as tax relief for companies to the Cabinet to encourage more alternative micro funding from the private sector.
Its minister, Datuk Seri Wan Junaidi Tuanku Jaafar, said this would help reduce the reliance on conventional way of government funding and grants to finance business needs, given that demand for such financing is growing amid limited government capacity.
Hence, the ministry would facilitate and promote access to a diversified financial landscape via alternative financing platforms spearheaded by the private sector, he told reporters at the memorandum of agreement (MOA) signing ceremony between SME Corp Malaysia and Axiata Digital Capital Sdn Bhd here, today.
"I can bring this matter to the Cabinet for incentives such as tax holiday, tax rebate and so on or credit guarantee from the government can be given, if there is any application,
"We’re looking into the trend (where) the government commitment is reduced due to other commitments," he said.
The MOA is to provide micro financing worth RM150 million for small and medium enterprises (SMEs), which will likely be disbursed in 18 months’ time.
Asked whether the government would slash allocations for funding and grants for micro financing in the upcoming 2021 Budget, Wan Junaidi said the reduction plan is not immediate.
He said MEDAC would request some allocation from the 2021 Budget from the Finance Ministry for informal business and micro SME development, especially in rural areas, as well as less developed states such as Kelantan and Sarawak.
Source: https://www.thestar.com.my/business/business-news/2020/09/28/medac-to-propose-ways-to-encourage-alternative-micro-funding-to-cabinet