Many Budget Developments are Geared Towards Empowering Local Entrepreneurs to Drive Economic Growth and Digital Transformation.
Kuala Lumpur, 18 October 2024 – The Malaysian government has unveiled a series of comprehensive measures in Budget 2025, aimed at strengthening the various sectors of the economy, including the growth, sustainability, and resilience of Small and Medium Enterprises (SMEs).
As SMEs form the backbone of Malaysia’s economy, contributing nearly 38% to the national GDP and accounting for 47.8% of total employment, these initiatives reflect the government’s strategic focus on enhancing their financial health, competitiveness, and long-term potential.
Through a blend of financing schemes, tax incentives, digital grants, and sector-specific support, Budget 2025 addresses key challenges faced by SMEs such as limited access to capital, digital adoption gaps, and export market barriers.
These efforts align with the broader national agenda to accelerate economic recovery post-pandemic and ensure more inclusive growth, benefiting entrepreneurs from diverse backgrounds, including women, youth, and underrepresented communities.
By equipping SMEs with the tools needed to thrive in both domestic and international markets, the government aims to future-proof the sector, fostering innovation and ensuring Malaysia’s SMEs remain agile and competitive in the global economy. The following highlights are just a few of the developments and allocations related to empowering SMEs.
Digital Matching Grant to Promote Innovation
RM50 million has been allocated under the MSME Digital Matching Grant and BSN’s Digital Vendor Grant to encourage SMEs to embrace digital technologies. This will allow businesses to invest in essential digital tools, enabling them to remain competitive in the evolving market landscape.
Extensive SME Financing Guarantees through SJPP
Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will guarantee RM20 billion in financing for SMEs. This includes a special RM5 billion allocation for Bumiputera SMEs, demonstrating the government’s commitment to supporting underrepresented entrepreneurs.
An additional RM40 billion in loans and financing will be provided through government agencies to facilitate business growth, helping SMEs tackle challenges such as working capital needs, expansion, and scaling efforts.
Sector-Specific Support for Women, Youth, and Micro-Enterprises
To promote diversity, RM650 million will be allocated to encourage women and youth entrepreneurs. Additionally, micro loans totaling RM3.2 billion will support small traders, including Bumiputera entrepreneurs, disabled business owners, and members of the Chinese and Indian communities.
Investment Incentives to Boost SME Competitiveness
The government’s Investment Incentive Framework focuses on high-impact investments and tax incentives. This includes outcome-based tax allowances to stimulate collaboration between multinational enterprises (MNEs) and local suppliers, benefiting industries such as electronics, chemicals, and medical devices.
CoSIF and NIDF funds totaling RM200 million will further encourage SMEs and mid-tier companies to participate in new industrial sectors, ensuring future readiness and resilience.
Empowering SMEs to Thrive in Export Markets
To help SMEs grow internationally, RM1 billion has been allocated to support export ventures, including RM750 million through EXIM Bank and RM40 million via MATRADE for global market promotion.
The SME initiatives introduced in Budget 2025 will play a vital role in fostering innovation and creativity across industries. Most industry players are looking forward to the opportunities that these grants and financing programs offer to help small businesses grow, scale efficiently, and compete on the global stage.
These initiatives also reinforce the government’s commitment to a whole-of-nation approach that prioritises inclusive participation and economic growth, ensuring that Malaysian SMEs are equipped to tackle emerging challenges and opportunities.
