Funding Societies’ Reaction to Belanjawan 2023: Malaysia MADANI
Response is attributed to: Chai Kien Poon, Country Head, Funding Societies Malaysia
Funding Societies, the largest SME digital financing platform in Malaysia and Southeast Asia soundly resonates with the 2023 Budget: Developing Malaysia Madani tabled by YAB Datuk Seri Anwar Ibrahim, Prime Minister and Minister of Finance, at the Dewan Rakyat today.
The Government’s aspirations to drive inclusive and sustainable economic development at this juncture are critical. Malaysia and the global economy face headwinds from supply chain disruptions, technological shifts, geopolitical conflicts, and projected slow economic growth in key markets. We are encouraged by the various initiatives supporting small and medium enterprises (SMEs) introduced by the Prime Minister in this RM388.1 billion budget.
Cash flow is the lifeblood of any business, and more importantly, is pivotal to an SME’s sustainability. For Malaysia’s 1.2 million SMEs including micro-enterprises, the availability of cash flow decides if they will thrive or die. As a participant of the Malaysia Coinvestment Fund (MyCIF) in providing social enterprises with much-needed access to capital, we welcome the additional RM40 million allocated for alternative financing. This directly projects the Government’s confidence in the FinTech segment (via digital financing platforms like Funding Societies) to complement traditional financial institutions in helping to close the financing gap as we remain diligent in serving underserved credit-worthy SMEs.
We also praise the various SMEs-centric incentives announced. While domestic economic activities have picked up since the lifting of COVID-19 control measures, SMEs still need all the assistance they can get as they recover from the setback which spanned two years. Reducing the tax rate from 17% to 15% for the first RM150,000 frees up RM3,000 for SMEs; this allows them to direct this towards improving their operational efficiency or increasing capacity. The RM40 billion allocated as credit guarantee and financing for SMEs would help much-needed access to capital. Women and youth-owned enterprises, too, stand to benefit from at least RM300 million allocated. We also applaud the budget’s focus on the agriculture sector and food security with RM250 million allocated for agricultural startups and e-commerce platforms via Agrobank’s Agrovest Investment Programme, aligned with Funding Societies’ aspiration to work closely with key agriculture agencies and stakeholders to support entrepreneurs & SMEs in the sector.
Since SME digital financing began in Malaysia, Funding Societies has disbursed close to RM2 billion to Malaysian MSMEs (RM3 billion industry total). Working hand-in-hand with the government through its policies and incentives, we will continue to introduce innovative financing to continue supporting our local SMEs.
