GOVT MUST ENSURE SEMARAK NIAGA FUNDS REACH TARGET GROUPS -- ANALYST

KUALA LUMPUR, Feb 23-- An economist says that banks, development financial institutions and relevant agencies entrusted with disbursing RM40 billion to increase financing access for businesses must not impose undue conditions and place obstacles in the way of funds reaching targeted groups.

To prevent this, Associate Prof Baharom Abdul Hamid called on the government to monitor the execution of the Semarak Niaga Keluarga Malaysia programme so that it reaches those who really need them.

Baharom, an economic analyst with the International Centre for Education in Islamic Finance (INCEIF), said to ensure integrity and transparency, whatever reporting made by the disbursing entities should be made public.

''You do not want something which looks good on paper or as a blueprint but when it comes to execution, suddenly you realise only 20 per cent of funds are disbursed."

He cited how in some funding programmes, ultimately only a small amount of the funds were finally dished out with disbursing institutions giving all sorts of excuses such as applicants not having a track record or not qualifying for these loans.

"These are disturbing times because of the pandemic and the government must step in to ensure the money allocated is disbursed to the right groups," he said during ‘The Brief’ - a Bernama TV news programme yesterday when responding to the funding plan recently launched by Prime Minister Datuk Seri Ismail Sabri Yaakob.

The RM40 billion programme, comprising direct loans, financing guarantees and equity injections, will increase the business sector's access to financing, especially for micro, small and medium enterprises (MSMEs) and the informal sector.

The disbursing entities include Tekun Nasional, Bumiputera Agenda Steering Unit (Teraju), Bank Simpanan Nasional, Bank Rakyat, Agrobank, and commercial banks, Bank Pembangunan Malaysia Bhd (BPMB), Permodalan Usahawan Nasional Bhd, SME Bank and Malaysian Industrial Development Finance Bhd (MIDF).

Baharom said that since the Prime Minister has clearly stated that the funds were for the benefit of every group of entrepreneurs, a mega assistance programme such as this should be followed up with strong and responsible execution.

"Integrity and transparency of the allocation and disbursement are crucial, and communication of these efforts on a periodical time basis, assessing the challenges and obstacles (if any) as well as efforts to tackle it should also be communicated to the people," he said.

Under the spirit of Keluarga Malaysia, he said the government should also ensure inclusivity, which means nobody was left out or marginalised including any racial groups, segments or sectors.

Emphasis should be on targeting assistance to the most vulnerable groups and closing the economic gap between races, regions and states, which is why "we need periodical and transparent reports as to what extent these gaps have been closed”.

"To ensure inclusivity, we cannot be following the dinosaur age ratings and rankings in qualifying for these loans and finances but rather have to be forward-looking.

"Only then will you get the buy-in of the people towards the sincerity and dedication of policymakers," he said.

Baharom said the Semarak Niaga programme was a timely and comprehensive intervention by the government in empowering business entities ranging from MSMEs to large corporations for the economy to bounce back as many of them were still trying to stand on their feet.

Against such difficult conditions, he lauded the huge injection of RM40 billion for the business sector, zero interest rate loans, micro-credit schemes, including the government's encouragement of peer-to-peer crowdfunding and encouraging entrepreneurship.

Given the variety and innovative financing solutions and financing assistance, Baharom believed the money would go a very long way in not only ensuring the sustainability of businesses but put the country in good stead to meet its growth targets of between 5.5 per cent and 6.5 per cent for this year.

"Once you reinvigorate the business sector, the spillover benefits would be enjoyed by other sectors in terms of business creation, stabilising prices, job creation, etc."

He said the programme was all the more pivotal as Malaysia was lagging behind neighbouring and regional economies.

-- BERNAMA