It’s all in the mindset
Despite what you may think, a business loan from the government isn’t a trap so they can pounce on the opportunity to destroy you in case you miss a payment! The fact is the government NEEDS its citizens to become entrepreneurs to contribute towards the country’s economy. SMEs contribute over a third of Malaysia’s GDP, employing millions across the country.
With this in mind, various initiatives have been implemented to improve SME financing, such as the SME Loan Fund of RM4.5 billion through commercial financial institutions. As of July 2024, the outstanding SME financing in Malaysia stood at RM401.8 billion, accounting for 51% of total business financing. In addition, Bank Negara Malaysia (BNM) allocated RM32.4 billion to the Fund for SMEs, offering another avenue for entrepreneurs seeking financial support.
If you’re already operating a business, you might be thinking, “Okay, but I don’t actually need a business loan now.”
It’s no surprise; if your sales are lagging, you’re either scared to death of the idea of increasing your monthly expenses, or just happy with your current sales because they cover your monthly costs. If that’s your train of thought, then you wouldn’t actually feel the need for more funds. This is where you need to open your mind to the flip side – could you tap on the potential of your business as well as bring down the costs with more employees and better equipment?
Beyond that, if you had more funds when you started off, would you have gotten a leg-up on your current competitors? Another point to consider is that, if your company were registered under ‘Sendirian Berhad (Sdn Bhd)’, the liabilities that would arise should you default on your loan would be limited to your business entity, and not extend to yourself.
Know your industry well
In Malaysia, SME funding depends on the nature of the business. This means that there are specific ministries which handle financing for those that fall under them. Below is a list of ministries that are involved in funding Malaysian SMEs:
| MINISTRY | IMPLEMENTER/AGENCY | PROGRAMME | SECTOR |
|---|---|---|---|
| 1) Ministry of International Trade & Industry (MITI) | Malaysian Industrial Development Finance Berhad (MIDF) | Soft Loan Schemes for Service Sector (SLSSS) | Services |
| Soft Loan for SMEs (SLSME) | Manufacturing & Services | ||
| Bank Perusahaan Kecil dan Sederhana Malaysia Berhad (SME Bank) | Tabung Usahawan Siswazah (TUS) | All | |
| Young Entrepreneur Fund | Services | ||
| Tabung Pembangunan Pengangkutan Awam (TPPA) | All | ||
| SME Corporation Malaysia (SME Corp. Malaysia) | Bumiputera Enterprise Enhancement Programme (BEEP) | All | |
| SME Emergency Fund (SMEEF) | All | ||
| 2) Ministry of Finance (MoF) | Malaysian Technology Development Corporation (MTDC) | Business Start-Up Fund (BSF) | All |
| Cradle Fund Sdn Bhd (Cradle) | Angel Tax Incentive | All | |
| 3) Ministry of Agriculture and Agro-based Industry (MOA) | TEKUN Nasional (TEKUN) | TEKUN Financing | All |
| Lembaga Pertubuhan Peladang (LPP) | Tabung Pembangunan Usahaniaga Peladang (TPUP) | Agriculture | |
| Bank Pertanian Malaysia Berhad (Agro Bank) | Paddy - I | Agriculture | |
| Skim Kredit Pengeluaran Makanan | Agriculture | ||
| Perusahaan Kecil dan Sederhana (IKS/PKS) | Agriculture | ||
| 4) Ministry of Rural & Regional Development (KKLW) | Bank Kerjasama Rakyat (BKRM) / Bank Perusahaan Kecil dan Sederhana Malaysia Berhad (SME Bank) | Rural Economy Funding Scheme (SPED) | All |
| Majlis Amanah Rakyat (MARA) | Skim Pembiayaan Mudah Jaya (SPiM) | All | |
| 5) Amanah Ikhtiar Malaysia (AIM) | Amanah Ikhtiar Malaysia (AIM) | Ikhtiar Financing Scheme | All |
| 6) Bank Negara Malaysia (BNM) | Bank Negara Malaysia (BNM) | Micro Enterprise Fund (MEF) | All |
| 7) Perbadanan Usahawan Nasional Berhad (PUNB) | Perbadanan Usahawan Nasional Berhad (PUNB) | SME Scheme (Services, manufacturing & engineering) | Manufacturing & Services |
| PROSPER Usahawan Muda (PUMA) | Services (Retail & distributives) |
Now, under these ministries, SME funding is further divided into implementers/agencies, resulting in quite a few funding schemes, which in turn, provide to the few specific sectors under them.
The reason for this information is that, if ever you’re interested in taking up a business loan, knowing which ministry, implementer/agency and funding scheme you fall under would ease the process. For the full list and further details of the available funds, visit the SME Corporation Malaysia official website.
Belanjawan 2025: New opportunities for entrepreneurs
The Malaysian government continues to introduce initiatives to boost SME growth. As part of Belanjawan 2025, these are several key initiatives aim to provide even more financial assistance:
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Digitalisation Matching Grant for SMEs & Hawkers (RM50 million): Aimed at helping small businesses go digital.
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NADI Centres (RM100 million): These centres will serve as platforms for entrepreneurs to tap into the digital economy.
-
Mid-Tier Company Program by Khazanah (RM1 billion): Helping mid-tier businesses scale up and compete globally.
-
Export Sustainability Incentives by EXIM Bank (RM750 million): Encouraging local businesses to expand internationally.
These initiatives are designed to keep Malaysian entrepreneurs competitive, especially in today’s challenging economic landscape.
Wait, there’s more financial assistance!
Business loans are not inherently bad—they’re tools for growth. With proper planning, loans can help you expand your business, reduce costs, and stay competitive. Whether you’re tapping into government-backed funds or exploring SME loans from financial institutions, there are plenty of options available to support your entrepreneurial journey.
Stay informed, assess your needs, and explore the funding opportunities that can give your business the boost it needs!
*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
