The importance of small, medium enterprises (SMEs) as the lifeblood of a nation’s economy is unquestioned. According to statistics provided by the World Bank, SMEs represent about 90% of businesses and more than 50% of employment worldwide.
Formal SMEs contribute up to 40% of gross domestic product (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included.
The Department of Statistics Malaysia stated that there were altogether 1,226,494 SMEs in Malaysia in 2021, accounting for 97.4% of the overall establishments. SMEs contributed 37.4% to Malaysia’s GDP and 47.8% to total employment.
With such numbers and magnitudes, it becomes increasingly vital for the government and especially the financial institutions to create a more conducive environment for SMEs to start, grow and prosper.
Various banks are already up to the task, but Bank Rakyat has taken upon itself a major role in enabling entrepreneurs to become a significant driver of Malaysia’s economy.
Being a pioneer, Bank Rakyat is guided by a vision of reducing social inequalities across rural societies. Their mandate was to raise the social and economic status of the people, provide them with opportunities for self-improvement and build a more promising future for the communities.
“Bank Rakyat aims to play a crucial role in empowering the entrepreneurship industry by harnessing the potential of Micro, Small, and Medium Enterprises (SMEs) and the cooperative sector. These sectors are envisioned to be strong catalysts for Malaysia’s economy,” said Bank Rakyat Chief Business Banking Officer Mohamad Shiblie Abg Sapuan.
Catalysing Success For SMEs
“This is all possible through the various financing packages and accompanying benefits that are bound to financially empower the people.
Through the Commercial Hire Purchase Financing-i, assistance is provided to micro, small and medium enterprises (MSMEs), cooperatives, corporate and other institutions to revitalise and accelerate their economic activities. Beneficiaries are now able to more easily obtain financing for the purchase of new vehicles, machinery and equipment,” said Shiblie.
Coming alongside this is BRTani, a financing package specially tailored to help food and agriculture entrepreneurs increase the country’s agro-food production.
That aid is specifically focused on capital expenditure, working capital and the development of agro-food projects. To facilitate the seamless process of procuring finance, Bank Rakyat further introduced a digital platform by the name of Quick Response to Entrepreneurs (QR2E), specifically customised for entrepreneurs.
“A virtual banking platform, the QR2E provides invaluable assistance to entrepreneurs such as comprehensive, fast and simple digital financial advisory services and product applications as part of its Banker to Entrepreneur (B2E) initiative,” he said.
It can be easily done via QR code scanning. Also, the contents are more personalised in terms of application, greatly improving the speed at which the products and services can reach the customers.
This is not to be confused as a one-way street because customers can share their needs. Once this is done, a representative from the bank will call up to make an appointment. Customers shall then receive advice on the financing facilities that match their business requirements.
Elevating Enterprising Entrepreneurs
Underlying these comprehensive efforts are the various entrepreneur empowerment programmes in place. Bank Rakyat wholeheartedly supports the objective of the National Entrepreneurship Policy, which is also in line with Bank Rakyat’s aspirations in driving the development of the micro, small and medium enterprise sector. This is outlined under the strategic plan of Bank Rakyat 2025.
A partner of Bank Rakyat, UiTM has hosted the Graduate Mentoring Programme with the aim to produce competitive entrepreneurs among graduates of higher education institutions.
Participants can look forward to hand-holding industry training and holistic guidance through joint ventures with selected vendor companies.
It is also through this programme that Bank Rakyat channels business financing of up to RM100,000. Accompanying the funds are training modules that cover entrepreneurship, business management, and marketing strategies. Additionally, there is a training program with vendors for three to six months.
Another notable initiative by Bank Rakyat is the Bank Rakyat UNIpreneur, targeting young asnaf and aspiring undergraduate entrepreneurs. Launched in Sept 2021, the pilot programme had been helping this category of entrepreneurs grow their business during the pandemic.
The intention is to create successful asnaf entrepreneurs to become zakat payers, thereby stimulating the national economy. A seed fund of RM2,000 is provided by the Bank Rakyat UNIpreneur Pilot Program and RM3,000 for Bank Rakyat UNIpreneur 2.0 to assist prospective young asnaf entrepreneurs from disadvantaged backgrounds.
In addition to financial aid, the program provides them with visibility, financial advice, coaching, mentoring and monitoring run by respective entrepreneurship institute through six months programs to ensure their long-term success.
Participants also have the opportunity to network with universities and successful entrepreneurs through the coaching and mentorship program.
Already the Bank Rakyat UNIpreneur 3.0 is in motion, registering 500 participants from 20 institutes of higher learning. The programme began in June 2023 and shall continue until November 2023.
Similar to the Bank Rakyat UNIpreneur is the RAKYATpreneur. The programme offers seed funding of RM5,000, aimed to also assist asnaf entrepreneurs from disadvantaged backgrounds to grow their enterprise.
To ensure their success, the RAKYATpreneur programme not only provides financial aid, but offers these entrepreneurs visibility, financial advice, coaching, mentoring and monitoring through a six months programme.
It is during this period of time that they can build valuable relationships with other experienced and successful entrepreneurs. The RAKYATpreneur 4.0 programme has 300 participants across Malaysia, starting in June 2023 until November 2023.
This collective effort is but a milestone along Bank Rakyat’s storied journey to financially empower Malaysians. More exciting financial products are soon to come, each playing a vital role for society and economy.
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