KUALA LUMPUR (Oct 18): Bank Negara Malaysia (BNM) said it will provide micro, small and medium enterprises (MSMEs) with affordable and holistic financing with a fund size of RM3.8 billion.

Speaking on its initiatives under Budget 2025, the central bank said the RM3.8 billion will go towards supporting MSMEs' move towards digitalisation and automation, embracing sustainable and low carbon practices, and agrofood production.

“Currently, more than RM7 billion is available for MSMEs under BNM’s Fund for SMEs. The funds provide funding to MSMEs for targeted purposes, segments and strategic sectors in line with national priorities,” BNM said in a statement on Friday.

Additionally, BNM noted that the financing limit for the Micro Finance Scheme (SPM) by financial institutions has been increased to RM100,000 from RM50,000, complementing the government’s decision to increase the stamp duty exemption on SPM’s instrument of agreement for an amount of up to RM100,000.

On start-up funding, a government grant of RM15 million will be allocated towards the seed capital component for iTEKAD, which will be matched with social finance funds. A RM5 million grant is also allocated through iTEKAD to subsidise microentrepreneurs’ annual takaful contributions — providing financial protection against risks to their livelihoods from accidents and natural disasters.

Meanwhile, BNM said a RM100 million matching fund will be provided by the government to spur the development of innovation in Islamic finance involving risk-sharing instruments.

“This fund will be used to support risk-sharing financing in the areas of climate and food security. The fund will be utilised to match funding from Islamic financial institutions or other private sector investors, as part of efforts to encourage innovation and increase familiarity to risk-sharing instruments,” it added.

BNM said it welcomes Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim’s announcement that the Consumer Credit Act (CCA) — a law to regulate non-bank credit providers — would be tabled in the next parliamentary sitting.

The central bank explained that a Consumer Credit Commission will be established with the passing of the bill as the new authority regulating non-bank credit providers and credit service providers.

“The CCA will regulate and supervise a range of entities currently not subject to any regulatory authority in Malaysia. This includes ‘Buy Now Pay Later’ companies, non-bank factoring and leasing companies, impaired loan buyers, debt collection agencies, and debt counselling and management agencies,” it added.

BNM noted that the CCA is currently being finalised by the Consumer Credit Oversight Board Task Force — led by the Ministry of Finance, BNM and Securities Commission Malaysia — with relevant government ministries and agencies.

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