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Malaysia is strengthening support for SMEs through additional financing, credit guarantees, and enhanced training grants, with implications for how employers fund growth and develop talent in 2026.
New initiatives announced by Bank Negara Malaysia (BNM), Ministry of Human Resources (KESUMA) and Talent Corporation Malaysia Berhad (TalentCorp) point to a shift towards more practical support, spanning both business financing and workforce development.
BNM expands SME fund, shifts towards guarantee-based financing
BNM has welcomed the Prime Minister YAB Dato’ Seri Anwar Ibrahim’s announcement in his 2026 New Year Message on an additional allocation for BNM’s Fund for SMEs, alongside the introduction of a new credit guarantee scheme.
Under this move, an additional RM2.5bn will be channelled into BNM’s fund, with a specific focus on first-time borrowers. According to BNM, it has so far made RM32.4bn available in concessional financing through participating financial institutions, mainly to support viable micro and small enterprises that face financial constraints. With the latest increase, the total allocation under BNM’s fund now stands at RM34.9bn.
Beyond the immediate funding boost, BNM said it will progressively transition towards guarantee-based support. The central bank is targeting guaranteed financing of up to RM10bn, a move aimed at reaching a wider group of SMEs, including new entrepreneurs and businesses without established borrowing histories.
This guarantee-based approach will be implemented in collaboration with Credit Guarantee Corporation Malaysia Berhad (CGC) and financial institutions. BNM noted that the shift is intended to deliver greater impact by sharing risks more effectively and encouraging lenders to support SMEs.
KESUMA highlights SMEs' role in workforce development
On the talent front, attention has turned to how SMEs can be better supported in developing people. During his first official visit to TalentCorp, Ramanan Ramakrishnan, Minister of Human Resources highlighted that micro, small and medium enterprises (MSME) employ nearly half of Malaysia’s workforce, yet many continue to face limitations in providing structured training and clear career pathways.
The visit formed part of KESUMA’s broader engagement with its agencies to align policy intent with on-the-ground implementation.
For SMEs in particular, one of the more immediate changes to be expected lies in enhancements to TalentCorp’s SME Industrial Training Matching Grant (LiKES).
In a media release on Tuesday, TalentCorp said the grant has been improved to make it easier and faster for employers to offer quality industrial training opportunities. Approval timelines have been shortened to 14 working days, while employers will now receive an upfront payment of RM2,000 per trainee.
The aim is to reduce uncertainty for SMEs, many of which operate with tight cash flows, while ensuring students and graduates gain meaningful workplace exposure and practical skills. By lowering administrative friction, the updated LiKES grant is expected to encourage more SMEs to participate in structured training, strengthening early career pathways for young Malaysians.
In parallel, MSMEs are also eligible for an additional 50% tax deduction on training expenditure in artificial intelligence and cyber security, following the Prime Minister’s announcement under Budget 2026. This is part of the MyMahir-National AI Council for Industry initiative, which seeks to align digital skills development with national priorities.
“Together, these initiatives form an integrated national talent ecosystem that supports Malaysians from entry into the workforce, through skills development, to sustained and inclusive workforce participation,” Minister Ramanan shared.
Lead image / HR Minister Ramanan Ramakrishnan's Facebook
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