Budget 2020 has just been tabled at the Dewan Rakyat by Finance Minister Lim Guan Eng. The budget received a lot of feedback from Malaysians and what can we conclude is entrepreneurs and small and medium enterprises (SMEs) received a major boost from Budget 2020.
The following are the highlights of Budget 2020:
1. Corporate, finance and fintech
- Govt will continue to ensure at least 30% of tenders of each ministry are reserved for only Bumiputera contractors
- 50% matching grant of up to RM5,000 to increase the digitalisation of operations for Malaysian small and medium enterprises (SME)
- RM50m allocation proposed to encourage SMEs to engage in more export promotion activities
- Govt to provide extra RM50m for SC’s My Co-Investment Fund (MyCIF) to assist SMEs that have difficulties in getting financing
- Govt to merge Bank Pembangunan Malaysia, Danajamin Nasional, SME Bank and EXIM Bank Malaysia to restructure development financial institutions (DFI)
- Govt allocates RM1 billion in investment incentives to attract Fortune 500 companies and global unicorns
- Govt to offer special investment incentive package worth RM1b per year for five years to local companies capable of penetrating overseas market
- Additional RM10m allocation to be set aside for MITI to increase monitoring to ensure approved investments are realised
- Government evaluating Carey Island development feasibility for next growth phase
- Govt intends to develop a 100-acre logistics hub at Special Border Economic Zone at Kota Perdana in Bukit Kayu Hitam to strengthen trade relations with Thailand
- National Fiberisation & Connectivity Plan will adopt public-private partnership approach involving total investment of RM21.6b
- RM20m allocation for Cradle Fund to train and offer grants to high-impact technology entrepreneurs
- Licensing for digital banks to be opened for public consultation by year end. A framework is expected to be released in 1H2020
- Digital bank licensing framework will be finalised by Bank Negara and open for application in the first half of 2020
- Govt to allocate additional RM50 million to Malaysia Co-Investment Fund (MyCIF) to benefit equity crowdfunding platforms and peer-to-peer (P2P) financing platforms.
- Ceiling on Market Development Grant (MDG) by Malaysia External Trade Development Corporation (Matrade) raised to RM300,000. Cap on entry to export exhibitions also raised to RM25,000. RM50 million allocated to encourage SMEs to join promotional activities.
- RM445m Bumiputera entrepreneur development grant for access to financing, provision of business premises, entrepreneurship training
- Govt to provide loans worth RM100m under Small Industries Entrepreneurs Financing Scheme for Chinese community
- Govt to provide RM20m in loans under entrepreneur development scheme for Indian community
- Govt to allocate RM500m as guaranteed facility for women entrepreneurs via Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP)
- Skim Jaminan Pinjaman Perniagaan will be enhanced, with the government guarantee raised to 80% of the loan amount while the guarantee fee is reduced to 0.75%. A RM500 million guarantee facility has been set aside especially for women entrepreneurs.
- SME Bank will introduce two new funds: a RM200m fund specially for women entrepreneurs, and a RM300m fund to support SMEs with potential to become regional champs
- Ministry of Entrepreneur Development to give RM10 million for advisory services and awareness for the halal industry
- Tax incentives for venture capital and angel investors will be extended until 2023
- Govt jobs worth RM1.3b dedicated for Bumiputera contractors
3. Palm oil
- Govt has launched palm oil replanting loan fund worth RM550m for smallholders
- Govt to implement B20 biodiesel for the transport sector by end-2020. This is expected to increase palm oil demand by 500,000 tonnes per annum.
- RM200m set aside for ‘Bantuan Musim Tengkujuh’ to eligible rubber smallholders under RISDA, Lembaga Industri Getah Sabah
- RM100 million allocated for Rubber Production Incentive in 2020 to enhance income of smallholders faced with low rubber prices
- Allocation for Agriculture and Agro-based Industry Ministry increased to RM4.9 billion, including RM150 million to support plant integration programmes such as for chilli, pineapple, coconut, watermelon and bamboo.
- RM855 million allocation under Federal Government Padi Fertilizer Scheme to boost padi yield