Malaysia is trying to do heavy lifting for cheap money.
The government is providing low-cost financing of up to 5 billion ringgit ($1.3 billion) to help small and medium-sized businesses move beyond survival mode into higher-value sectors such as technology, green projects, automation and tourism, Entrepreneur and Cooperative Development Minister Steven Sim Chee Keong was reported by Bernama.
Speaking at the launch of the “Heritage Brands of Penang” publication in Penang, Sim said the financing, priced at interest rates ranging from 3 percent to 5 percent, will be distributed through licensed banks, prescribed financial institutions and development finance institutions, including Bank Rakyat and SME Bank.
The latest funding forms part of the government’s wider PowerUp10K campaign, a year-long initiative aimed at empowering SMEs at different stages of growth.
Under the program, the ministry aims to disburse a total of 15 billion ringgit, above the 10 billion ringgit previously allocated as low-cost financing.
Sim said the campaign aims to help 10,000 businesses grow and has allocated at least 100 million ringgit for talent development programs that are expected to train up to 100,000 entrepreneurs.
The government also wants to increase the value added contribution of SMEs to over 750 billion ringgit ($189 billion) and support 100 local companies to reach revenues of 100 million ringgit ($25.17 million) in the medium term.
He said SMEs, including legacy businesses, should take advantage of financing opportunities and other government-backed programs to build resilience and expand in the long term.
Sim said around 2 billion ringgit ($500 million) in financing has already been approved under the initiative as of February 2026.
This push suggests that Malaysia is becoming more conscious of using subsidized finance not only as a buffer for small firms, but also as a policy tool to steer them into digital and greener industries.
The emphasis on automation, technology adoption and transition economy activities also points to a broader goal: to increase SME productivity and make small businesses more competitive as cost pressures and regional competition intensify.
