The current health situation has affected the economy at every level of society. To counter the effects on the people and SMEs, the Prime Minister has so far introduced two Prihatin Stimulus packages comprising of aid of RM250 Billion for the economy and an additional RM10 Billion for the SME. 

This article looks into the overall budget and what it could have addressed differently.

For now, it helps those that qualify, from the 0% interest Bank Simpanan National (BSN) & Tekun Loan, the RM3,000 grant for night market, hawker street seller type Industri Kecil Sederhana (IKS or SMEs), the 3 months wages subsidy for business owners, rental relaxation for businesses renting from government linked premises etc. 

It helps the Micro SME (MSME) type entrepreneurs but not so much for the semi small medium ones including those in service based industries apart from the wages restructuring negotiations, loan moratorium from non-traditional licensed financial providers, those employing foreign workers and premise owner rentals tax incentive. One can read the Prime Minister’s speech text for details.

In general, it’s a good package but it could have been better. All that said, SME companies will only be on the receiving end if they qualify. Fair enough because if you’re a company that pays taxes, you at least get some of the help being offered. 

It remains to be seen how many of these 700,000 hawkers or pasar malam micro seller’s types are actually registered on Inland Revenue Board (IRB), Companies Commission of Malaysia (SSM) and local councils. 

This data would be valuable as a health check baseline of our SME’s. Kudos though for the IMSME portal under Credit Guarantee Corporation (CGC) and the Central Bank to facilitate the SME loan applications. 

What happens though to those people or companies that may not qualify for the traditional financing and those who have low Credit Tip-Off Service (CTOS) scores or blacklisted but have small businesses and still need to live and earn? The licensed P2P lending players can play a supporting role at this and should have been included in the package to help them.

There should be a more constructive, outcome and accountable approach to these stimulus. The key word is stimulus. Businesses have no choice but to adapt and change into a different distribution and digital model in order to reach customer or consumers. That's the reality of the future. How do we stimulate this better?

With this current government, YB’s Khairy Jamaluddin, Dato' Saifuddin Abdullah, Dato' Seri Mohamed Azmin Ali, YM Tengku Dato' Sri Zafrul and others are in prime positions to influence this as a means of stimulating and catalysing the local economy of these Micro & SME businesses through digital value chain means. 

Digital & Mobile commerce will play an integral part of keeping the giant machinery of trade and commerce going. From hyper local hubs, gig economy services, logistics and fulfilment, supply chain movement of raw materials, clearing and customs for import export. 

All the talk of IR4.0 Automation, AI, Blockchain, Big Data, IoT, Robotics etc, how many companies actually made the effort to move towards that transition? Great ideas, poor execution. A published directory of the vetted players of this space like an ala carte menu would have been a helpful start. Common sense really but nobody took the lead.

Identify the many ecosystem Startups and Tech players in this space via MDEC, Cradle, MaGIC, AIM, MATRADE and other related innovation agencies. Create a bridging grant or incentive or tax exemption for the companies under SMECorp, PUNB, MARA, Felda, MDEC eUsahawan and others Micro & SMEs agencies, to help them take up or subsidize their digital adoption. Use the list as a solution to continue to operate during the MCO and generate revenue using the many digital tools available, that the government has likely probably invested in. 

That’s easily over 500,000 entrepreneurs and businesses in those Micro & SME databases ripe for adoption. Agency collaboration and synergistic opportunities need to be accelerated to derive better ROI value to stakeholders. Right now, the intra connections here are weak and fragmented.

Taking restaurants as another example case study. Think of your local legitimate neighbourhood restaurants like Kassim Mamak’s, Ah Seong Kopitiams and Ratna Tom Yam stalls. Most have suffered huge drop of 70-90% in sales. Salaries still have to be paid, if the business is still alive that is, despite the incentives. Delivery services only accounts for a fraction of their revenue as order numbers are low. Grab delivery charges are high (25-35% cut). 

In some cases, the delivery cost is higher than the order amount. Supply of raw materials limited and no bulk buying power due to perishable goods. Some companies need authorization letters from KPDNKK and MITI for operating and transportation purposes but the application process is buggy, if not incoherent if you ask some companies who have tried overwhelming the website. 

Surely there can be ways to allow limited minimal operation without violating the MCO terms in the coming months, should the numbers be contained. If the MCO likely continues after May, there will another whole issue of getting food to the poor. Could this be coordinated elegantly digitally? Yes, definitely.

Supply side, say Mak Cik Kiah wants to sell Cili Giling & Santan to Restaurants like Hj Salleh but she's a micro business and stuck because distributors and buyers don't see her existence. She needs to get online onto the multiple available E-commerce sites, including the B2B types like SupplyBunny, FoodMarketHub, Lapasar or Dropee. 

Unfortunately, she might not realize that these companies even exists to help her business despite the obvious benefits. The restaurant could digitally discover her Cili Giling and a host of other products for supply. There might be a cost but if it's part of the stimulus package, then she and the likes can get on it rather than merely receiving cash handouts. 

Again, not saying the current incentive is not good or not welcomed, it could have been better innovatively structured. Make it part of a qualification criteria as well in order to unlock the cash incentives. Some of these SME's may already know of the existence but adoption still remains low.

Demand side, the same restaurant could get onto integrated platforms like Storehub's Beepit.com, where they can list their menu or products, collect payment for orders even with e-wallets like Boost, GrabPay or Touch'n'Go, connect with their delivery providers Lalamove or GoGet, to get these orders to the end consumers for under RM10 cost per day. This can be expanded by host of other product deliveries too like Bungkusit, Pgeon or ordering via Whatsapp by Otomate.me and even possibly mobilizing a Digital Ramadan Bazaar solution. 

There are easily over 15 other up and coming e-commerce platforms like DesaMall, SoukAsia or OurShop too, apart from the likes of Lazada and Shopee, which unfortunately have too many products or SKUs where smaller local sellers may be drowned in the listings. There's a cost to using these services or solutions surely, as they too need to operate to survive, but by empowering the public or business to use it through some form of stimulus, then it's a win-win for both sides in increasing digital adoption and monetary movement that protects the internal economy.

How about we digitally empower some of the grounded workforce to earn side income and use the allowed available digital services, as agents, dropshippers and online sellers, the multiplier effect is far greater and sustainable. 

That cuts across to Mak Cik Kiah’s single father or mompreneur friends, grounded flight crews, youths, or elderly folks still able to contribute. It will take time to learn how to fish of course, but it has to start somewhere. 

How about a KPI based motivation for the B40 to mobilise, empower and elevate themselves instead of waiting for benefits in times of distress. Qualify to earn it via gamification in e-wallets.

There's so many other examples and scenarios for other businesses too. Let's not forget, what about those many retail & chain stores too in malls or the ones in the tourism related areas, those in the service side that need to adapt to digital operations & servicing. 

What about the companies that occupy the commercial shop lots out there in every neighbourhood. How about those in the gig type jobs like entertainers, designers, or programmers and the list goes on who are their own self enterprise. Will it be enough as mentioned in the examples in the stimulus or should we have empowered them to pivot or adapt digitally to also not be as vulnerable in future?

One of the biggest complaints from the first stimulus was about how business owners still had to legally continue paying full wages to employees happily sitting at home doing nothing, despite the MCO’s grinding halt effect to their business owner’s income. While this has been partly addressed with the current stimulus with the RM600 to RM1,200 per staff pay subsidy and allowing of pay cuts and unpaid leave options, the reality is there will still be those that can’t sustain. 

I can only imagine the number of cases that will be referred back to the Ministry of Human Resources. I’m reminded at how large Japanese and Korean companies like Samsung, Sony, Hyundai and Panasonic approached this human resource problem during past financial crisis. Layoffs are frowned upon in their culture.

The communication message and strategy was simple. We survive, your jobs survive. We’re in tough times, but we go through it together. Employees understood that rather than getting fired, they willingly accepted a pay cut to rough out the tough times with the company.

I’ve told my entrepreneurs the same thing but gave it a slight twist. With their legal consent, accept a slight pay cut but also repurpose them to help sell and task them with other means of generating income. Support them in what they need and they might pick up a new skill set and be rewarded for it. 

Inventory still moves and sales commissions can make up the difference of the full pay. It’s fair and creative approach to employee retention and business survival than a rigid order with limited room for flexibility.

That's where there is a lack of deeper imagination in the SME Prihatin announcement. Appeasing everyone and an inability or unwillingness to do so, was so last century. These days the outliers who are daring enough to do things from a different perspective, is seen as an asset and will benefit from opportunity in this tragedy. 

There’s a lot of scenarios that the PM has given with Mak Cik Kiah, Madam Lee, Haji Salleh and Surjit Kaur. The various SME bodies that have given their concerns and feedback may have made the point about the problem but not sure if solutions were rushed or thoroughly proposed. 

Pushing SME’s on taking more loans could be a risky gamble in this period of financial markets & economic uncertainty. The way the global economy indicators are pointing and the health situation is going, this will be a definite business challenge for the next 1-2 years minimum domestically and around the ASEAN region for trade. With both offline and online infrastructure in place, at the very least they might just survive and will come out stronger.

It'll take a year at least or more for normalcy. Here's why, one person having it, means the whole world is still potentially in trouble. From nothing last year to these daily numbers now. Everyone knows it takes 3-14 days to show effects causing the spread to be undetected and can be asymptomatic to a certain extent, meaning the spread will be similar like ocean waves. 

One hit after another. Not to mention that the it has mutated to infect animals now. Rainy season later here, the coming autumn and winter too later this year for those countries still under fighting this ongoing pandemic and will likely trigger a resurgence. 

Here we are now debating to allow people to travel for Raya and doing offline Bazaar Ramadhan’s. There is now a perfect storm as an impetus to get them to change, break old habits, embrace new methods and adapt to survive. 

Maybe this needs to be shared with the ones higher up there and maybe it might be incorporated in the next round of announcements for Startups and other industries affected. Be the government that innovates, solves the institutional voids and sets the trend for other countries to follow.

The author is Proficeo’s Program Director and Master Coach for MDEC’s eUsahawan Level Up Program, Cradle’s Structured Coaching Program & the Coach and Grow Program since 2010. He has seen over 2000 business ideas over the past 15 years. He was formerly the Senior Investment Manager at Cradle since 2004. He has been involved regionally with the ASEAN Young Entrepreneurs Council circuit for the past 5 years.

The views and opinions expressed in this article are strictly those of the author and do not necessarily reflect the official policy or position of any agency, association or organization connected to or mentioned by the author.