This post is brought to you by Axiata.
The COVID-19 pandemic has resulted in some serious economic repercussions for industries all around the world. Some of the hardest hit have been micro-SMEs, with operators mostly falling within the B40 income bracket in Malaysia. Additionally, micro SMEs are also likely to have minimal savings and cash, and financing can be hard to come by in a time of severe economic downturn.
However, Axiata has announced the launch of a RM150 million cash fund to offer financial assistance to micro-SMEs in Malaysia, with RM20 million contributed by the Ministry of Finance. The Axiata Group, along with sub-companies Celcom Axiata, edotco Group, and Axiata Digital, have set up the Axiata COVID-19 Assistance Program, which aims to offer fast, easy, and secure micro-financing.
More than 50% of SMEs in Malaysia are micro-SMEs
In the Malaysian landscape, micro-SMEs make up more than half of all small and medium-sized enterprises, according to Axiata; these include companies who have fewer than 5 employees, with an annual sales turnover of less than RM250,000. The statistics serve to highlight the importance of providing financial aid to entrepreneurs in a time of crisis, with Axiata saying that only 38% of all SMEs in Malaysia have the financial runway to be self-sustainable until May 2020.
What’s worrying here is that statistics from Bank Negara Malaysia from 2018 have shown that conventional financing may not fully fulfill the needs of SMEs in Malaysia, with smaller companies generally having poorer access to credit. A variety of reasons are at fault here, from the rigid nature of financing terms, high rejection rates, or simply the potential stigma of applying for financing help.
Fast, easy, and secure micro-financing
The Axiata COVID-19 Assistance Program aims to address this by making micro-financing more accessible to micro-SMEs. This is made possible through Aspirasi, a digital financing services provider that offers Shahriah-compliant micro-financing via Aspirasi Assist.
Aspirasi Assist’s financing facility starts from RM1,000 up to RM10,000, and favourable terms include suspended repayment for the first six months, 0.5% profit rate and a 15 month tenure. There is no need for a guarantor, and minimal collateral is required.
Initially, eligible applicants were limited to operators from within the Axiata ecosystem (Boost, Aspirasi merchants and Celcom dealers). However, Aspirasi has informed us that this is now available for any merchant to apply and receive financing support. If you’re interested, here’s a quick how-to guide:
- Head over to the Aspirasi website here
- Begin your 3-minute application process to determine your eligibility
- Have on hand your IC and business details (including business registration number), as well as a selfie for verification purposes
- If eligible, funds will be deposited into your chosen bank account within 48 hours (2 days)
Axiata says that these funds need to be “quickly and efficiently” disbursed, especially in light of the current economic climate.
Micro-SMEs can also opt for additional micro-insurance coverage. This covers emergency situations with income, accidental death coverage, and financial assistance for COVID-19. Benefits include emergency expenses relief of up to RM1,000, and accidental death insured of RM10,000.
According to Axiata President and Group Chief Executive Officer, Tan Sri Jamaludin Ibrahim:
“As our government and institutions battle on the hour to mitigate the spread of the coronavirus within our communities, corporate Malaysia is also rising to the fore to leverage on our resources and capabilities to alleviate the impact on businesses and communities. We have a very tight window to cast a lifeline to quickly get them back on their feet in order to weather and recover from the pandemic.”
In essence, Axiata’s program is a way for smaller SMEs to attain financial assistance, with many not meeting requirements for more conventional financing options with banks. Axiata’s suite of digital services, in addition to the program, aims to empower the micro-SME community, with the ecosystem able to deliver aid where it matters—and without a middle man.
In a time when Malaysian micro-SMEs are needing financial support the most, Axiata’s CEO also invited more corporations to join the program:
“I also welcome corporations to join us and be part of this program to make a meaningful difference in the livelihood of small businesses.”