Chief Minister Datuk Patinggi Abang Johari Tun Openg came to the aid of small and medium enterprises (SMEs), micro enterprises, petty traders and hawkers when he announced on Friday a second aid package ― Bantuan Khas Sarawakku Sayang (BKSS 2.0) ― valued at RM1.1 billion.
Following is the full text of the announcement:
Assisting small, medium, micro enterprises, hawkers and petty traders to sustain socioeconomic wellbeing
On March 23, 2020, the Sarawak government announced Bantuan Khas Sarawakku Sayang (BKSS) worth RM1.1 billion. Since then, I received feedback from various business associations and chambers of commerce which have requested the government to consider assistance to small and medium enterprises (SMEs), micro enterprises as well as hawkers and petty traders.
I am aware that SMEs are key drivers to Sarawak’s economy. The SMEs make up over 75 per cent of our business sector, contributing 20 per cent to Sarawak GDP and providing about 600,000 jobs for Sarawakians.
I know entrepreneurs by definition are people who take risks to set up businesses, taking on financial risks in the hope of making profits and they are obviously important drivers to our economy.
Therefore, it is important for the GPS government to be responsive to the problems faced by SMEs, micro enterprises as well as hawkers and petty traders so that they can remain resilient in the face of economic pressures that are affecting us all.
How do we define SMEs?
According to SME Corp, SMEs include the services, manufacturing, agriculture, construction, and mining and quarrying industries.
For the manufacturing sector, SMEs are firms with sales turnover of not exceeding RM50 million or number of full-time employees not exceeding 200 workers.
As for the services and other sectors, SMEs are firms with sales turnover of not exceeding RM20 million or number of full-time employees not exceeding 75 workers.
One of the main challenges faced in the business sector is cash flow. Therefore, I have requested my deputy, Datuk Amar Douglas Uggah Embas to engage with NGOs, business associations, chambers of commerce and a number of local financial institutions to find solutions to the problems that our local SMEs are facing.
I am happy that all of them have provided insights into how this deadly virus has affected their day-to-day business activities. They all have voiced their needs for government interventions and assistances. My office through EPU Sarawak has compiled all the requests and data submitted by the respective associations for my Cabinet to deliberate and make decisions based on our capacities.
As a result of all these engagements and the information gathered, the Cabinet is happy to announce additional measures for BKSS that I term as BKSS 2.0. This second aid package, valued at RM1.1 billion is to ease the financial burden of our SMEs, micro enterprises as well as hawkers and petty traders to assure continuity of the enterprises in these trying times. The government is considering four measures under BKSS 2.0. The measures are as follows:
Measure 1: Interest free soft loan for SMEs
Based on records, there are over 40,000 SMEs operating in Sarawak. These SMEs are the backbone of Sarawak’s economy which provide job and business opportunities to Sarawakians.
In collaboration with Maybank Bank, Hong Leong Bank and RHB Bank, under the Bank Negara Malaysia (BNM) Special Relief Fund (SRF), the Sarawak government has agreed to absorb the interest costs due to be released to our SMEs. The interest free loans of RM1.0 billion will be made available to our SMEs.
The financial implication for the interest rates subsidy over the three and a half years is RM80.7 million. The scheme will benefit more than 40,000 SMEs throughout Sarawak.
SMEs need to apply for the loans directly from any branches of either Maybank Bank, Hong Leong Bank or RHB Bank. All SMEs have an option to apply for either Islamic or conventional loans for the scheme.
Under this measure, all Sarawak registered SMEs must first comply with the National SME Development Council (NSDC) SME definition and the following easy financing conditions:
- Working capital in respect to salary payment;
- Interest free loan amount from RM20,000 to RM500,000;
- No collateral required;
- Sole proprietorship, partnership and Sdn Bhd; and
- Business in operations three years or more.
For SMEs which operate less than three-years, they can still opt to apply for the RM50 million Micro Credit Scheme through the Ministry of International Trade and Industry, Industrial Terminal and Entrepreneur Development Sarawak (Mintred), which I have announced in the first BKSS on March 23, 2020.
For SMEs to better understand the interest free loan assistance provided, let me share an example. The loan amount is based on total staff salary for six months.
Example of the calculation:
Total staff salaries x 6 months
= (10 staff x RM3,000 x 6 months)
= RM180,000 loan amount
The loan amount of RM180,000 will be released in full amount to the SME once the necessary documentation is completed. I hope this measure will ensure business resilience and job security for our people.
Measure 2: Special grant of RM1,500 to hawkers and petty traders through Sarawak Pay
A special BKSS grant amounting to RM1,500 per entrepreneur will be provided to each hawker and petty trader registered with local authorities. This will benefit more than 65,000 petty traders and hawkers throughout Sarawak. The grant will be paid out to the respective qualified entrepreneurs through Sarawak Pay account in two tranches. The overall cost of the grants to be borne by the Sarawak government is RM98.4 million.
For those hawkers and petty traders who are eligible to receive assistance but have no Sarawak Pay account, you can easily apply. It is very simple. Just use your smart phone to download Sarawak Pay App through Apple Store or Google Play Store and apply online. Please fill in the required information, press the send button and wait for payment to be credited into your account. I believe this should be a very simple process.
I was informed that over 15,000 merchants throughout Sarawak are already accepting Sarawak Pay. Almost all prominent supermarkets throughout Sarawak, like Everrise, Everwin, H&L, LePaPa, Ta-Kiong, E-Mart, BS Supermarket, CS Market, Unaco and even Doremon in Sarikei and Hong Guan Mini Market in Kapit are accepting Sarawak Pay. Therefore, I would encourage everyone to go cashless and help us minimise contact with physical cash, whereby reducing the chances of Covid-19 virus transmissions. Furthermore, Sarawak Pay is giving cash backs for all your transactions.
For example, Ani’s Laksa Sarawak at Kampung No 6 here in Kuching now accepts Sarawak Pay. She also uses Sarawak Pay to buy ingredients for her laksa at supermarkets nearby and receives cash backs for her transactions.
So far, there are over 250,000 Sarawak Pay users and growing. I hope one day, all Sarawakians will go cashless.
However, the government does not forget those who are outside the internet coverage and may not have easy access to Sarawak Pay, especially those registered petty traders with Fama and Department of Agriculture (DOA) in the rural areas, they will be given cash vouchers.
Measure 3: Abolishment of two per cent interest rates to zero per cent for three and a half years under Micro Credit Scheme
In addition, to ease the financial burden of micro enterprises, the government will facilitate this sector in deriving the full benefits from all the assistances that have been announced.
Among the measure is to zerorise the two per cent interest rate for three and a half years under the existing Micro Credit Scheme by the Ministry of International Trade and Industry, Industrial Terminal and Entrepreneur Development Sarawak (Mintred).
The Micro Credit Scheme is operated by Agro Bank Berhad and Sarawak Economic Development Corporation (SEDC) with a maximum loan size of RM50,000 at zero per cent interest rate for each enterprise. I hope our entrepreneurs would take opportunity of this scheme to apply through SEDC or Agrobank counters. A total fund size made available for this measure amounted to RM50 million will cost the Sarawak government RM3 million.
Measure 4: Waiver for rentals to SMEs in retail sector operating on premises owned by state GLCs
On March 23, 2020, I announced a discount of 50 per cent for rental of markets and stalls particularly under the purview of the Local Authorities. Now the government will waive rentals for SMEs in the retail sectors which are operating on premises owned by government-linked companies (GLCs).
I would like to thank state GLCs such as SEDC, Land Custody Development Authority (LCDA) and Bintulu Development Authority (BDA) which have agreed to give waivers on their premises to SME tenants for a period of six-months until September 2020.
On the same principle of burden sharing, I would also like to encourage owners of private premises throughout Sarawak, for example; the Spring, Vivacity, Merdeka Plaza, Aeon mall, Star Megamall, Delta Mall, Boulevard, Imperial, Majma Mall, Bintang Plaza and others to provide similar assistance to their tenants by reducing their rental rates considering that the government has given them 25 per cent discounts on their assessments rates as well as 15 per cent utility bills discounts on these commercial premises.
Financial implication
Pakej Bantuan Sarawakku Sayang 2.0 will inject a total of RM1.1 billion of liquidity into Sarawak’s economy and will drive domestic business activities and consumption. This involves the expenditure by the Sarawak government amounting RM182.12 million.
I wish to stress here that it is not necessary for the Sarawak government to table an Additional Supply Bill for all the aid packages that have been announced. This is because the funds are already made available via the Contingency Fund as approved by the DUN in the 2020 Budget.
Conclusion
Pakej Bantuan Sarawakku Sayang 2.0 is over and above the assistance by the GPS government which was announced earlier on March 23, 2020 to help our SMEs, micro enterprises as well as hawkers and petty traders to sustain their businesses due to the impact of the Covid-19 pandemic.
Today’s infrastructure improvements will drive tomorrow’s economy. For that, I wish to assure that all on-going strategic infrastructure projects and initiatives in Sarawak which were approved such as state water supply grid, coastal roads and bridges will continue the moment the movement control order (MCO) is lifted and I assure these strategic long-term projects will strengthen and sustain our economic growth.
I would like to assure that the Sarawak government will continue to be transparent in its spending and all actions taken are based on the provisions of the law and will continue a prudent financial practice and good fiscal discipline to ensure that the state’s financial position remains strong and manageable.
