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Companies may have problems claiming wage subsidies under SME stimulus package, says FMM

FMM In The News: THE STAR, PETALING JAYA, Monday, April 6, 2020 - The additional allocation worth RM10bil for small and medium enterprises (SMEs) is timely and welcomed, says the Federation of Malaysian Manufacturers (FMM).

However, its president Tan Sri Soh Thian Lai said that as much as the government had responded to SME needs, some conditions for companies to qualify for the stimulus benefits may render it a bit difficult to claim the wage subsidies.

"The increase of the RM7.9bil allocation towards the Wage Subsidy Programme to RM13.8bil exceeds the RM12bil that FMM had proposed in our appeal to the government following the announcement of the Prihatin Rakyat Economic Stimulus Package.

“We also note that the limit on numbers eligible for the wage subsidy has been increased for the large companies from 100 previously to now 200 per company.

"However, we had hoped that the condition of a 50% reduction in revenue in order to qualify for the wage subsidy would have been removed as well as the ceiling of RM4,000.

"We appeal to the government to remove this condition in view that many companies under the movement control order (MCO) have yet to finalise their financial accounts for March 2020," said Soh in a statement Monday (April 6), after the announcement by the Prime Minister.

He also praised the stimulus package benefits for micro SMEs, such as the abolition of the 2% interest rate for the Micro Credit Scheme under the Bank

Simpanan Nasional.

The government had also announced that it was extending the interest-free facility to Tekun Nasional with an allocation of RM2mil and a maximum loan of RM10,000 per company.

Soh further said that while the moratoriums with regard to administrative dealings with the Companies Commission of Malaysia (CCM) was a relief, he hopes there would be a further waiver of interest for a moratorium period of six months.

“FMM also recommends the moratorium extended to trade facilities, overdraft and leasing.

“We also ask for a further reduction in interest rates for the RM5bil Special Relief Facility for SMEs from 3.5% to 2%, lessen lending conditions including collateral requirement as well as reduce the bureaucratic red tape involved in accessing the facility including the documents required and conditions attached, ” he said.

He said FMM also hoped that this was not a one-off package for the business community and that it would be reviewed from time to time as this will assist large corporations that SMEs are dependent on as part of the business ecosystem.

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