Image from thethought.tayermedia.com
RM4.9bil for 189 programmes in 2007;
RM3.2bil for 198 programmes in 2008;
RM70bil loans for 140,000 SMEs in 2008;
RM13.3bil or 38,000 SMEs (since March 200);
RM63.2bil loans for 132,000 SMEs in 2007…
Mathematics is not always my strong point and these figures got my head spinning! The story in The Edge almost threw me of the edge. I couldn’t help but rewrite it: “Incentives for SMEs in the pipeline”.
Shouldn’ it be “SMEs down the drain pipe with more (empty) promises”…?
KUALA LUMPUR (rewrite from BANGKOK): Prime Minister Abdullah Ahmad Badawi revealed today that the government will assist small and medium enterprises minimize the impact of rising costs and oil prices on them, but he failed to mention what exactly are those incentives.
The measure – which until now remains a “draft idea” and its specifics “too early to mention” – is supposed to encourage SMEs upgrade their hardware as well as adopt new technological software.
Until a proposed “special committee” scheduled in two weeks’ time determines the format of the incentives, much of this remains merely ‘post election promises’ by Abdullah, who is also the Finance Minister.
He did, however, told reporters that the ‘deal’ will be led by Bank Negara. Other ministries involved (in the committee) are the Treasury and the International Trade and Industry Ministry.
He also threw in other ‘offers’ that would be considered to reduce impact on rising costs on SMEs, such as “implementation of development programmes to enhance capabilities of SMEs and reduce their operational cost”.
That would be mean ‘trainings’ or ‘raising awareness and understanding’ on existing SME development programmes and financial assistance schemes; in other words, window dressings.
Although Abdullah said “In the future, for sure the SMEs will continue to grow, especially through the programmes organised by the committee”, it remains uncertain what those programmes entail and how effective they would be.
But the sum to carry out those programmes to assist SMEs this year is already certain and hefty:
198 key programmes worth RM3.2 billion! 141 capacity building programmes, 34 to strengthen the existing infrastructure and 23 to increase SMEs access to financing. A total of 189 key programmes were already implemented last year, involving a total expendi ture of RM4.9 billion.
Who says the government does not have money?
Meanwhile, the plan is to release RM70 billion loan to about 140K SME accounts from the services, agriculture and agro-based sectors this year; where RM13.3 billion has already been banked into 38,000 accounts at the end of March. It does not stop here for all this will be complemented by various government funds and schemes.
“In 2007, RM63.2 billion loans were approved to more than 132,000 SME accounts by banking institutions and development financial institutions. This exceeded the initial 2007 target of RM51 billion loan approvals to 110,000 SME accounts,” Abdullah said.
A total of 200 micro entrepreneurs were expected to benefit from the Rural Economy Funding Scheme and 200 franchise entrepreneurs from the Franchise Financing Scheme. All these are in line with “the strategies formulated under the Ninth Malaysia Plan (9MP) and the Third Industrial Master Plan (IMP3)”, he added.
But the question remains is how sure are we that all those monies will really go to SMEs? How do they determine which accounts get the money and how much? How do they monitor the progress of the SMEs whose got the monies?
Until we are told how, this bizarre and expensive idea(s) remains a major scam!