GOVT'S BOOST TO SJPP GUARANTEE SCHEMES TIMELY, EXECUTION CRUCIAL - SBF

By Zaphne Philip

KUCHING, May 6 (Bernama) -- The government’s decision to raise guarantees under the Business Financing Guarantee Scheme (SJPP) by RM1 billion is a timely move to strengthen business confidence and enhance liquidity among Malaysian small and medium enterprises (SMEs).

Sarawak Business Federation (SBF) secretary-general Datuk Jonathan Chai welcomed the move, noting that it would particularly benefit SMEs engaged in international markets.

“While the measure is commendable, its adequacy will depend on the scale and duration of economic disruptions following the United States’ recent tariff action.

“For SMEs involved in export manufacturing or embedded within affected supply chains, the ripple effects could be significant. A flexible, impact-driven funding approach is needed, one that can be scaled based on real-time needs,” he told Bernama today.

In a special Dewan Rakyat sitting yesterday, Prime Minister Datuk Seri Anwar Ibrahim said the government has agreed to raise the guarantee allocation under SJPP by RM1 billion, mainly to assist SMEs affected by US tariffs.

Anwar said that to further support affected SME entrepreneurs, the government has also approved an additional RM500 million for the soft loan fund offered through development financial institutions.

Commenting on the additional RM500 million soft loans, Chai said it is a positive initiative, but emphasised that its success depends on accessibility, processing efficiency, and outreach.

“A major hurdle that remains is the limited awareness and capacity among SMEs, particularly smaller firms, to navigate complex financing systems. Many also lack the collateral or guarantees often required by risk-averse financial institutions,” he said.

Without addressing these bottlenecks, the funds risk being underutilised or failing to reach the SMEs most in need.

"SBF recommends more aggressive awareness campaigns through local business networks, simplified documentation processes, including alternative credit assessments for informal businesses and robust monitoring mechanisms to track disbursement and implement real-time improvements," he said.

Chai also highlighted the long-term risks of the US reciprocal tariffs on export-dependent SMEs, particularly those in electronics, automotive parts, and textiles, noting these could erode price competitiveness, disrupt supply chains and reduce market access.

“To remain resilient, SMEs must diversify markets, adopt new production strategies, and invest in workforce upskilling. They must also embrace innovation, strengthen regional trade linkages such as through the Regional Comprehensive Economic Partnership (RCEP) and accelerate digitalisation efforts,” he added.

-- BERNAMA