00:00The government pledges a RM1 billion financial lifeline to support small and medium-sized enterprises against the impact of U.S. tariffs.
00:08While the details are still being finalised as of this moment, we asked Dato William Ong from SME Association's Samantha for his take on the best way forward to ensure effective and targeted distribution of funds.
00:22We welcome the Prime Minister's announcement of the RM1 billion financial assistance.
00:28I think it is timely and shows that the government recognises the importance of SMEs as the backbone of our economy.
00:36I think the details are being finalised, but what we expect are that the distribution will follow a targeted and, of course, a blended model.
00:43Partially direct grants, partly low-interest loans, and partly guarantees through agencies like SME Corp, Matrade, MIDF, and CGC.
00:52To ensure that the funds go to the most affected businesses, we really should prioritise companies with a high percentage of exports to the U.S. market,
01:01industries that are directly impacted by tariff-related disruption, maybe SMEs that employ large numbers, especially in rural or semi-urban areas,
01:10as well as, most importantly, companies that are willing to pivot or adopt to digitalisation and green transformation.
01:16But the key, really, is in transparency and speed, because that is crucial.
01:21Many SMEs cannot wait 6 to 12 months for disbursement.
01:25They need the bridging assistance now and today.
01:28William also highlighted the challenges SMEs face, not only due to U.S. tariffs on Malaysia, but also from their impact on China.
01:35The impact of the U.S. tariffs on Malaysian SMEs will really depend on the nature and scope of the tariffs.
01:42But any trade restrictions by the United States, which is, of course, our third largest trade partner, will definitely have an impact on our economy.
01:51SMEs in the E&E sector, which, of course, makes up 39% of our exports to the U.S., are particularly vulnerable.
01:57Even if our firms are not directly hit, many of us are part of the regional supply chain for the Chinese and Taiwanese components.
02:05So any disruption upstream affects all of us as well.
02:08Other sectors likely to fit a pinch include furniture, rubber products, and palm oil derivatives, where SMEs make up the bulk of the exporters.
02:17For example, furniture makers in Penang and Moa are already telling us they are already seeing reduced demand and pressure to reduce price.
02:24That said, I think it is not all negative.
02:27Some Malaysian SMEs may benefit from the trade diversion, especially those who are able to quickly pivot or scale up production to replace supply gaps caused by the tariffs on China and other markets with higher tariffs on our own.
02:39But this window is small and competitive, so the ability to adapt swiftly is the key.
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