RM90 million available for SMEs through co-funding initiative, says minister
KUALA LUMPUR: Entrepreneur Development Minister Redzuan Yusof says the government will provide access to financing for small to medium-sized enterprises (SMEs) by roping private investors into a co-funding initiative.
Under the SME Investment Partner Programme, he said, private investors would invest in viable SMEs.
“A total of RM90 million has been raised and is now ready for investment into potential SMEs from the initial seed fund of RM40 million by the government via SME Corp,” he said.
Speaking at the launch of the two SME partners, Warisan Quantum Management Sdn Bhd and RHL Ventures Sdn Bhd, he said SME Corp, under the ministry, would appoint the fund management partner to raise funds from private investors which would be matched by funds from the government.
“Both SME partners have raised RM50 million to be matched with the government’s seed fund,” he said, adding that more partners would be announced soon.
Redzuan said the programme would complement the existing financing landscape for SMEs through the offer of equity and debt financing, mainly at the early stage of one to three years.
“This includes SMEs in all sectors from main street firms that have strong growth potential and innovation, as well as new emerging areas.”
At a press conference later, Redzuan said SMEs are the backbone of the economy, accounting for more than 98% of business establishments in the country.
However, he said their contribution to the economy is not yet on par with that of SMEs in medium- and high-income countries.
“In Malaysia, SMEs account for just more than a third of the total gross domestic product (GDP), compared to an average of 39% in high-middle income nations and 40-60% in high-income nations.
“We hope to see them contribute 50% to our GDP in the future.”