The Malaysian Industrial Development Finance Berhad (MIDF) has inked a Memorandum of Understanding (MOU) with the Malaysian Investment Development Authority (MIDA) to offer small and medium enterprises (SMEs) and Mid-Tier Companies (MTCs) the opportunity to benefit from MIDA’s Smart Automation Grant (SAG).
The SAG initiative, introduced in the National Economic Recovery Plan or PENJANA with an initial allocation of RM100 million, was launched by the Senior Minister and Minister of International Trade and Industry (MITI) on 2 December 2020. This grant is awarded to eligible SMEs and MTCs on a matching basis or 50 per cent of total eligible expenditures, up to a maximum grant cap of RM1 million per company. Based on the encouraging response for SAG, the Government announced an additional RM50 million fund under the Strategic Programme to Empower the People and Economy or PEMERKASA to drive more SMEs and MTCs to improve their operation and production through automation and digitalisation.
The collaboration between MIDF and MIDA aims to promote and facilitate the SAG’s utilisation through a strategic alliance. Under this alliance, MIDA will provide grants for qualified companies, whereas MIDF will offer financing to these companies for their remaining expenses. Additionally, qualified companies already enjoying financing facilities from MIDF may lower their financial commitment upon successful application for SAG.
Ahmad Khairuddin Abdul Rahim, Deputy Chief Executive Officer II of MIDA, remarked, “The Government, through MIDA is committed to assist Malaysia’s industry players and businesses towards higher productivity and market competitiveness. The collaboration between MIDA and MIDF is in line with our objective to provide financial assistance for Small and Medium Enterprises (SMEs) and Mid-Tier Companies (MTCs) towards automation and digitalisation. These two processes are crucial components and push factors in speeding up operation process, reducing errors and increase productivity.”
“The objective of SAG is to reassure SMEs and MTCs in the manufacturing and services sectors to automate and digitalise their operations and production, to spur their competitiveness, to reduce the reliance of foreign workers and to create new job opportunities in high value-added sectors. The Government looks forward for Malaysian companies to embark transformation towards digitalisation and automation to remain resilient amidst the impact of the Covid-19 pandemic and economic contraction. We trust that this partnership would result Malaysia’s businesses growth across industry supply chains” he added.
Charon Wardini Mokhzani, Group Managing Director of MIDF, iterates, “This MoU underlines the close relationship between MIDA and MIDF and our joint commitment to support companies that aspire to automate and modernise. As a nation, we need to increase productivity and value-add Malaysian businesses to higher levels in our path towards a high-income nation; investing in automation and digitalisation is one way to achieve this. MIDF is honoured to be part of this important initiative.”
SMEs and MTCs that have been undertaking manufacturing or services activities in the past 12 months are eligible to be considered for SAG. The automised machine, equipment or software purchased through this grant must be utilised directly in the company’s value chain in order to qualify for the incentive. Improvements in two components (productivity and efficiency) will be assessed on a range of criteria such as reducing unskilled workers, man-hours, defect rate and the increase in production volume. Interested companies are advised to submit applications to the various industries and services divisions in MIDA.
–Bernama–
