RM1.2b microbusiness aid must not be buried in bureaucracy: Fomca

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Kritik
03 Sep 2026
25
SubCategory | Economic Policies

RM1.2b microbusiness aid must not be buried in bureaucracy: Fomca

By Harith Kamal

PETALING JAYA: The government’s RM1.2 billion boost for microbusinesses risks missing the very traders it is meant to help if access to the funds is weighed down by bureaucracy, the Federation of Malaysian Consumer Associations (Fomca) observed.

Its CEO Dr Saravanan Thambirajah said the additional RM1 billion in microfinancing and RM200 million Geran Sejahtera Madani could provide crucial support for hawkers, small grocers, night-market traders and home-based businesses grappling with rising operating costs.

However, he said the government must ensure application procedures were simple, transparent and accessible, particularly for smaller operators outside major cities and those with limited digital literacy.

“The key issue will be implementation. Assistance must be easy to apply for, transparent and accessible.

“We should avoid complicated procedures and documentation that may discourage the very small traders the programme is intended to assist.”

Saravanan said information on the schemes must also reach traders beyond major urban centres to prevent assistance from disproportionately benefiting businesses with better access to digital services or professional help.

He said clear monitoring mechanisms should also be put in place to establish who received the assistance and whether the funds reached genuine micro and small businesses.

The government recently announced an additional RM1 billion in microfinancing, raising total microfinancing facilities for 2026 from RM5 billion to RM6 billion.

It also announced the RM200 million Geran Sejahtera Madani to assist hawkers, small traders, night-market traders and mothers running businesses from home.

Saravanan said microfinancing presented a separate concern, as assistance in the form of loans could create further financial pressure if repayment terms were not appropriate.

“For microfinancing, affordability is equally important. We should not solve a cash-flow problem by creating another debt problem.”

He said financing should therefore come with reasonable repayment terms and proper financial guidance to help small businesses manage the funds sustainably.

Saravanan said the measures could help businesses manage immediate cost pressures, but should form part of a wider effort to strengthen the financial resilience of households and micro-enterprises.

He said Budget 2027 should look beyond direct assistance by addressing the structural costs faced by families and small businesses, including food, housing, transport, utilities and healthcare.

“Targeted assistance should continue for vulnerable households, but it should complement structural reforms rather than replace them.”

He added that the government should ultimately measure the success of its assistance not simply by how much money was distributed but by whether recipients became more financially secure and better able to withstand rising costs.

Source: rm1-2b-microbusiness-aid-bureaucracy-fomca

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