CYBERJAYA (May 20): Bumiputera-mandated agencies under the Ministry of Economy will move away from giving out ‘free money’ or grants, to focus on providing financial leverage and assistance for business expansion, its minister Rafizi Ramli said on Monday.

The move by Unit Peneraju Agenda Bumiputera (Teraju), Yayasan Peneraju and Ekuiti Nasional Bhd (Ekuinas) is to ensure that the support will only be channelled to high quality and resilient Bumiputera companies that create value for the national economy, Rafizi said. The hope is that they will grow to become qualified for listing on Bursa Malaysia, he noted.

"We don't want to give free money,” he told reporters after the “Scaling Up Bumiputera Value Creation” event here. “They have to run the company and many of the financial support products that we provide are actually in the form of credit, so they have to pay back.”

The minister acknowledged that the ministry and the agencies will have to take some time to convince Bumiputera businesses of the new approach, as it may be seen as the government taking away their allocation.

“If you give the money for free, it will not be fair to others,” Rafizi stressed. “The money that should have reached 1,000 people will only reach 100 people, because these 100 people won't have to pay back.”

Instead, Rafizi assured that the move is to widen the reach of the allocation so that more Bumiputera companies will benefit from the financial assistance.

"My hope is that more Bumiputera companies will benefit and start to rise, then I think people will find out that this rougher way, maybe it could be said rougher, is what the Bumiputera ecosystem needs to speed up competition," he explained.

Earlier on the same day, Rafizi announced the realignment of Teraju, Peneraju and Ekuinas, in line with the government’s goal to empower and boost the economic participation of the Bumiputera community.

The realignment was carried out by the ministry after stakeholder engagements earlier this year. The initiative also follows the Mid-Term Review of the 12th Malaysia Plan, which outlined a strategy to strengthen the role of Bumiputera-mandated agencies in delivering the Bumiputera agenda.

Through this realignment, Peneraju, Teraju and Ekuinas will play a special role in the Bumiputera entrepreneurial ecosystem.

Rafizi said Peneraju will focus on talent development, and Teraju will provide financial support and assistance to expand and grow Bumiputera companies, while Ekuinas will continue to drive wealth creation and Bumiputera's economic involvement through corporate equity ownership.

All three agencies have been given targets to achieve by 2030, he said.

Peneraju would need to provide 10,000 Bumiputera talents “ready to compete and become industry players” while Teraju is expected to provide financing totalling RM1 billion through “collaboration with the private sector and develop and improve the capabilities of 1,000 companies”, Rafizi said.

Ekuinas, meanwhile, will support more Bumiputera entrepreneurial companies that have excellent track records and profits through an RM800 million fund, he added.