Implementation progress of Malaysia's PENJANA packages on schedule

Finance Minister Tengku Zafrul Aziz yesterday shared the 24th report by the Economic Stimulus Implementation & Coordination Unit Between National Agencies (LAKSANA).

The report, posted on the minister's Facebook page, was released by Malaysia's Ministry of Finance as an update on the progress of the PENJANA packages introduced earlier this year, in the country's ongoing battle against COVID-19. It focuses on the status of the PENJANA packages, while the full updates of the PRIHATIN packages will be shared as an appendix and uploaded on the Ministry of Finance's website.

Overall, the level of implementation on both packages is either high or on schedule.

Under the PENJANA package: 

• One-off cash giving initiatives involving a payment of RM647mn (such as e-Penjana, assistance to the affected, and more) the implementation rate is at 68%.
• Initiatives that involve an implementation period of between three to six months, involving the allocation of RM4.27bn (such as the extension of the wage subsidy, My30, PRKA B40, and more) implementation is according to the schedule at the level of 43%.

The report noted that this is an encouraging level of achievement, given that the PENJANA initiative only started to be implemented in phases between June and September.

Under the PRIHATIN package: 

• One-off cash giving initiatives which involve RM14.7bn (such as assistance to e-hailing and taxi drivers, government pensioners, and more) have seen a high implementation rate of 94%.
• Initiatives with an implementation period of three to six months, involving the distribution of RM108bn (such as electricity bill discount, wage subsidy, e-CAP KSWP, and more) are progressing on schedule at 85%.

Zooming in on the PENJANA package, which is divided into three goals (empowering the people, business recovery, and economic stimulation), the updates are as follows:

PENJANA goal #1: Empowering the people

First, the Health Care Scheme for the B40 Group (PeKa B40) is a scheme fully funded by the government and regulated by the Ministry of Health, that emphasises the need for the early detection of infectious diseases, especially as they get older. Between 1 July and 25 September 2020, a total of 99,694 claims were received amounting to RM6.64mn.

Eligible applicants will also receive other benefits from this scheme which consists of medical equipment assistance, incentives to complete cancer treatment and transportation fare incentives.

Second, to encourage childcare centres to adopt the new Standard Operating Procedures (SOP) norm, one-off grants worth up to RM5,000 have been distributed to every nursery and kindergarten operator registered under the Ministry of Women, Family and Community Development (KPWKM) and the Ministry of Education (KPM).

Incentives to train new babysitters are also provided for childcare and early education courses under KPWKM. As of September 25, 2020, a total of RM19.86mn has been utilised by almost 12,000 nurseries and kindergartens for this purpose.

Third, the Wage Subsidy Programme has been extended for an additional three months (July, August and September) under the PENJANA package, and will be extended for between three to six months (for existing and new applicants) under the Kita Prihatin package. As of 25 September 2020, a total of RM11.93bn worth of subsidies have been approved, benefiting more than 2.6mn workers.

Fourth, a total of RM1.5bn has been allocated for employer recruitment promotion programmes thus far, through which a total of 43,998 employees (an increase from 38,186 last week) have found employment.

This number includes 34,476 people under the age of 40, 5,456 people aged between 40 - 60 years, 284 disabled and 3,782 apprentices.

PENJANA goal #2: Business recovery

With Small and Medium Enterprises (SMEs) playing an important part in Malaysia's economic growth, the PENJANA package continues to provide support through increased access to financing to ease their short-term cash flow burden. 

First, the Government is helping SMEs easing the burden of maintaining employment by assisting SMEs with cash flow through allocations under the Bank Negara Malaysia Fund among others. For instance: 

• RM300mn has been allocated to the Automation and Digitalisation Facility (ADF) to encourage SMEs to automate processes and digitalise their operations to increase productivity and efficiency. Qualified SMEs can obtain up to RM3mn with a financing period of up to 10 years at a rate of 4% per annum. Applications are open from 6 March 2020 to 31 December 2020. As of 25 September 2020, RM71.4mn worth of applications have been approved by local banks, benefitting 60 SMEs.
• RM1bn has been allocated to the Agrofood Facility (AF), aimed at increasing national food production and exports. Eligible SMEs can obtain up to RM5mn with a financing period of up to eight years at a rate not exceeding 3.75% per annum. As of 25 September 2020, local banks have approved a total of RM535.8mn, benefitting 859 SMEs.

Second, the Government provides assistance and encourages SMEs and Intermediate Companies (MTCs) towards the digitalisation of operations and trade channels. 

This includes an allocation of RM100mn for SME Digitalisation Match Grant in collaboration with telecommunications companies, RM500mn in financing through SME Technology Transformation Fund, and Smart Automation Grant amounting to RM100mn with a maximum limit of RM1mn per company.

As of 25 September 2020, a total of 2,224 SMEs have applied for these three applications and a total of RM18.3mn has been disbursed, benefitting 1,314 SMEs. The breakdown of grant grants according to the type of custom is as follows:

• SME Registration Matching Grant: As of 25 September 2020, a total of 2,324 SMEs have applied for this and a total of RM4.7mn has been approved which will benefit 1,470 SMEs. 
• SME Technology Transformation Fund: As of 25 September 2020, a total of 20 SMEs have applied for this proposal and a total of RM18.4mn has been approved to benefit 9 SMEs.
• Smart Automation Guarantee: As of 25 September 2020, a total of 72 SMEs have applied for this assistance and a total of RM599,153 has been approved which will benefit 5 SMEs.

Third, as part of the package, the Diligent Business Recovery Scheme or TEKUN Business Recovery Scheme (TBRS) has been implemented. As of 25 September 2020, a total of RM75.5mn has been channeled and utilised 11,383 Micro SMEs.

Fourth, the Micro Credit Financing PENJANA under Bank Simpanen Nasional (BSN) has been implemented as part of the package, with a total of RM73.7mn being channeled to and utilised by 2,007 SMEs and micro SMEs as of 25 September 2020.

Fifth, a total fund of RM2bn has been allocated through the PENJANA SME Financing, with priority given to SMEs who have never received a loan from a bank before. As of 25 September 2020. a total of 3,351 SME applications have been approved with a loan amount of RM795.3mn.

To ensure the survival of Bumiputera entrepreneurs, the government also provides a Bumiputera financing programme amounting to RM500mn to be channelled through the following two agencies, namely:

• Perbadanan Usahawan Nasional: The eligibility criteria focuses on the use of funds for working capital; operating expenses, and more. Financing facilities range from RM100,000 to RM1mn for a period of up to five years, at an interest rate of 3.5% per annum, with a moratorium of up to six months from the date of issue. Up till 25 September 2020, a total of RM31.1mn has been channelled and utilised 87 Bumiputera businesses.
• Majlis Amanah Rakyat: This comes in the form of working capital loans to assist affected Bumiputera entrepreneurs, including the private education sector with a maximum loan amount of RM1mn. The comes with an interest rate of 3.5% per annum. 

Additionally, through the PENHANA Tourism Financing Facility, the Government has allocated RM1bn to assist SMEs in the sector to ensure continuity and resilience. This facility offers a working capital loan of up to RM300,000 to eligible SMEs with a loan rate of 3.5% per annum and a repayment period of up to seven years. SMEs in the sector can apply for financing through 12 banks.

As of September 25, 2020, a total of 303 SMEs have applied for assistance and a total of RM17.5mn has been approved to benefit 90 SMEs.

PENJANA goal #3: Economic stimulation

Under the third goal of stimulating the economy, the Government has put in place three key measures. 

First, under the National Generator Fund, launched on 27 August 2020, RM1.2bn has been allocated specifically for the venture capital start-ups in Malaysia. This fund aims to drive economic recovery through the process of digitising national businesses in the high impact tech sector. 

The fund consists of an about RM600mn investment by the Government, with the remaining RM600mn coming from international investors via matching investment capital contributions. Requests and recommendations for the Proposed For Government (RFP) closed on 25 September 2020, with a total of 51 RFPs submitted for the review process.

Second, to support the Agriculture and Food sector, the Government introduced the AgroMakanan Scheme Facility (PENJANA) under Agrobank. This provides financing of up to RM30mn with an interest rate of 3.5% with a maximum expenditure of RM50,000 for up to 5 years. This financing facility aims to provide financial assistance to micro-entrepreneurs especially in the agro community under the B40 category who are involved in agricultural activities and food production affected by the COVID-19 pandemic.

As of 25 September 2020, a total of 5,932 applications have been approved, channeling a total of RM46.1mn to benefit 2,355 entrepreneurs.

Third, under the ePenjana scheme, as of 24 September 2020, 11.15mn people have successfully received RM50 in their e-wallet, with a total of Rm557.46mn credited.

Fourth, to support the arts, culture and entertainment sector, a number of allocations have been provided. They include: 

• A total of RM100mn in the form of loans with 3.5% interest, and RM30mn in grants for the creative, events, and exhibitions industries under MyCreative Venture
• RM10mn provided under the CENDANA initiative.

As of 25 September 2020, a total of 46 applications have been received for MyCreative Venture, for a total of RM34.2mn. As for the CENDANA initiative, a total of 120 applications have been approved, providing RM439,120 to businesses. 

Through the LAKSANA unit. The Malaysia Government will continue to monitor the implementation of all economic stimulus packages that have been announced and work closely with implementing agencies to ensure assistance arrives quickly and effectively. This includes the KITA PRIHATIN package that was announced recently.

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