Is the Sarawak Government failing to protect SMEs?

DAP Sarawak Chairman, Chong Chieng Jen recently took the Sarawak government to task for failing to be more proactive in helping the SME business sector in Sarawak.

Chong specifically went after the government’s “interest-free loans” which he believes has been ineffective in actually helping most of the SMEs in Sarawak.

He’s not wrong. The interest free loans announced by the Sarawak Government has the perfect catch-32 predicament. On the one hand, the state has promised to subsidise interest loans to SMEs, which is certainly needed during the pandemic. However, the subsidy is only applicable to special loans provided by Bank Negara. The catch? Bank Negara has a very limited fund for these loans.

Photo credit: SME ASIA

As a result, many SMEs who applied for such loans through commercial banks, though their applications had been approved, are still waiting for the loan disbursement from Bank Negara.  

Not forgetting, these special loans charge very low interest, thus the subsidy on interest provided by the State Government is actually pretty minimal.

In short, despite the numerous announcements of “special loans to SMEs”, “State Government absorbing interests on loans for SMEs” and “SMEs are important to the country’s economy”, a disproportionately small amount of funds has been channelled to the SMEs.

This can actually be disastrous. SMEs in Sarawak are absolutely vital to the state economy. Extrapolating MIER’s figures on unemployment to Sarawak, it is estimated that more than 200,000 workers could lose their jobs if SMEs are not provided sufficient assistance.

Photo: Chong Chieng Jen wants more help for SMEs in Sarawak

“Many are considering closing down and more are starting to retrench their workers.  Yet, both the Federal and the State Government are still sitting on their laurels on such an important economic issue, ie. saving jobs”, says Chong.

You can read Chong Chieng Jen’s full statement on the SME sector in Sarawak here: https://dapmalaysia.org/en/statements/2020/06/05/29892/

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