KUALA LUMPUR: The budget allocation of RM23.7 billion in terms of grants, soft loans and guarantees will empower small and medium sized enterprises (SMEs) to build competitive capabilities and meet the economic challenges of today and tomorrow.
The Minister of International Trade and Industry, (MITI) Datuk Seri Mustapa Mohamed said, in addition to these allocations, the RM1 billion provided by major institutional investors and the tax incentive for investment in venture capital will stimulate entrepreneurship and promote the growth of start-ups and innovation in Malaysia’s economy.
“With the support and allocations, I am confident that the SMEs will be able to contribute 41% to Gross Domestic Productivity (GDP) by 2020. The government is committed in positioning our SMEs in new growth areas including the digital economy.
“We are currently in the process of on boarding more than 1,500 local SMEs into the first phase of the Digital Free Trade Zone (DFTZ) to be launched by the Prime Minster and Jack Ma in early November,” he said in a statement today.
He added, as recent years have been to promote high quality investment and thus the allocation of RM200 million for High Impact Strategic Fund under MIDA will assist in achieving the objective.
These investments he said would facilitate technology-transfer and creation of high skilled jobs that will change the landscape of our economy as Malaysia continues to transform itself into a high income status.
The allocation of RM150 million for MATRADE, MIDA and SME Corp.to undertake export and investment promotion activities including Market Development Grant (MDG) will further strengthened the internationalization agenda.
“For the year 2017, we expect our total trade to grow by 17.1% to RM1.7 trillion while exports will accelerate by 16.6% to RM917.5 billion,” he added.
Mustapa also mentioned that the allocation of RM1 billion for EXIM Bank for credit insurance facility and RM200 million for export financing will address the financing problem faced by SMEs which are looking to export.
This will be instrumental in boosting the export of SMEs as the government is targeting to raise their export contribution to GDP to 23% by 2020.
The minister also said, the allocation of RM1 billion in the form of 70% government guaranteed loan for companies that plan to innovate will help MITI to achieve the objective that is to strengthen Malaysia’s embrace of Industry 4.0.
“The provision of RM245 million worth of matching grant under the Strategic Domestic Investment Fund will allow us to upgrade Smart Manufacturing facilities, which are an important dimension of Industry 4.0,” he said.
The Budget 2018 he said, places SMEs in the mainstream of socio-economic development. SMEs form 98.5% of total establishments where 76.5% of them are micro enterprises. The financial provisions allocated for SMEs will help them play their roles in delivering the targeted economic growth of 5.2-5.7%. _Malaysia World News