KUALA LUMPUR (Oct 29): The recovery of businesses is a top priority for the government under Budget 2022, with a host of incentives and assistance schemes to be offered to businesses, especially small-and-medium enterprises (SMEs).

During the tabling of the budget, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said a key area of focus is to enhance the access of business to financing, especially for micro enterprises and the informal sector.

A total of RM40 billion will be allocated under the Semarak Niaga programme which includes direct loans, financing guarantees and equity injections, to benefit enterprises of all sizes — from micro entrepreneurs to public listed companies.

Meanwhile, about RM1.8 billion will be channeled through the micro credit schemes of various agencies such as TEKUN, Agrobank, Bank Simpanan Nasional (BSN), Bank Rakyat and Bank Negara Malaysia (BNM).

This includes the Informal and Micro Financing Scheme under TEKUN, which will offer loans of up to RM10,000 at zero interest and a 12-month moratorium.

BSN and Agrobank will also be offering micro financing of up to RM75,000 at zero interest for the first six months, coupled with a moratorium of up to six months.

The government will also continue to support equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms.

“An interesting development during the pandemic is that there was a surge in growth of financing through ECF and P2P financing, with over RM1.3 billion obtained through these avenues since the start of the pandemic.

“Therefore, these forms of financing will continue to be supported with an RM80 million allocation via matching grants for the Malaysia Coinvestment Fund, in addition to Bank Pembangunan Malaysia Bhd’s investment of RM100 million,” he said.

To assist companies facing gearing or leverage issues, RM2.1 billion in funding avenues via equity and quasi-equity investments will be introduced.

This initiative will be spearheaded by SME Bank, in collaboration with TERAJU and BSN. BPMB will also be offering a Rehabilitation and Support Through Equity (RESET) scheme, while BNM will set up a Business Recapitalisation Fund worth RM1 billion for the same purpose.

There will be a special initiative to assist Bursa Malaysia-listed companies, which will see the injection of funds into companies that have been affected by the Covid-19 pandemic via a government-owned special purpose vehicle (SPV), in the form of equity or other related instruments.

“For this purpose, Khazanah Nasional Bhd will be given the mandate to assist governments in providing the infrastructure required to manage a fund of at least RM3 billion,” said Zafrul.

To ensure that businesses can obey the standard operating procedures (SOPs) amid the pandemic, the government has proposed to extend the income tax deductions relating to premise renovation and renewal costs of up to RM300,000 until Dec 31, 2022.

For Micro SMEs, the government has proposed the postponement of tax instalment payments for six months until June 30, 2022.

All micro SMEs are also allowed to amend the estimated income tax payable in the 11th month before Oct 31, 2022.

There are also special tax deductions until June 2022 to owners of buildings and premises that have given at least 30% rental discounts.

Read also: RM3b injection into pandemic-hit listed companies, RM2b for companies with gearing issues
See more Budget 2022 highlights here.