Press Statement
5th November 2020

The Penjana Tourism Financing (PTF) scheme is heavily underutilised

I refer to my parliamentary question on 3 November 2020 (Question No. 10) regarding the Penjana Tourism Financing (PTF) scheme.

The PTF scheme was launched by the government in August 2020 with an allocation of RM1 billion. Small and Medium Enterprises (SME) in the tourism industry can apply for a loan of up to RM300,000 through participating banks.

In the question, I asked for the latest status of the PTF scheme with regards to the number of applications approved and its effectiveness.

The Minister stated that as of 14 October 2020, 397 applications have been received and 148 approved, with a total financing of RM28.8 million.

This means that only 2.88% of the allocated RM1 billion has been utilised as of 14 October 2020. Hence, the effectiveness of the PTF scheme in assisting the tourism sector comes into question.

Source: Klook

Several SMEs have informed me that it is difficult to obtain approval for the PTF scheme because it is processed by commercial banks based on stringent criteria.

In her reply, the Minister also stated that applications are rejected mainly because of negative balance sheets, unsatisfactory business plans, and low debt service ratio.

SMEs in the tourism industry are indeed facing and will continue to face such problems.

The main problem faced by SMEs in the tourism sector is the demand shock, i.e. reduction in tourism activities. This is inevitable due to Covid-19.

Source: Klook

The government should consider putting the application process directly under the purview of the Ministry of Tourism, Arts, and Culture, with the banks assisting only in the technical process.

The PTF scheme may be able to assist a small number of SMEs, but it seems to be ineffective overall because it is in essence, a loan. Many SMEs currently cannot afford or do not have the confidence to undertake a loan to continue their business.

Source: The Star

What is really needed, on the other hand, is a moratorium for existing loans and the continuation of the wage subsidy program for another six months, or longer for the tourism sector. These steps are important to enable the SMEs to stabilise their finances and plan for a longer term.

For micro SMEs such as souvenir vendors, trishaw riders, and food stalls, they require direct monetary assistance. Most of the micro SMEs do not have the capacity to sustain losses or shift to other businesses in the short run. Most of them are self-employed workers, and their basic livelihood and income have been badly affected.

Source: Klook

The government should consider giving out additional grants similar to the Geran Khas Prihatin (GKP), specifically for micro SMEs in the tourism sector.

In the long term, the government must spearhead the development of other high potential economic sectors so that those affected in the tourism sector can transit to other growing sectors.

Hence, I urge the government to have another look at the PTF programme and develop a more holistic plan for the tourism industry.

Khoo Poay Tiong
MP for Kota Melaka