Malaysia Allocates RM5 Billion In Low-Cost Financing To Support SME Transformation
Malaysia’s Ministry of Entrepreneur and Cooperatives Development has announced up to RM5 billion in low-cost financing to support the growth and transformation of small and medium enterprises (SMEs). The financing, offered through licensed banks and development financial institutions, aims to help businesses invest in technology adoption, automation, digitalisation and green economic activities. Details of the initiative were outlined during an event in Penang and reported by Bernama, highlighting the government’s broader push to strengthen SME resilience and competitiveness.
The financing will be available at rates between three and five per cent. According to the ministry, the funding is intended to support SMEs transitioning towards higher-value operations, including the adoption of advanced technologies, greener production methods and tourism-related activities.
Low-Cost Financing Channelled Through Banks And Development Institutions
Minister Steven Sim said the funds will be distributed through licensed banks, prescribed financial institutions and development financial institutions, including Bank Rakyat and SME Bank, which operate under the ministry. The financing forms part of the government’s wider strategy to strengthen Malaysia’s SME sector as it adapts to digital and green economic trends.
“These funds will be channelled through all licensed banks, prescribed financial institutions and development financial institutions, including Bank Rakyat and SME Bank under my ministry.” — Steven Sim, Minister of Entrepreneur and Cooperatives Development
Sim encouraged SMEs, including long-established heritage brands in Penang, to make use of the financing and other government support measures aimed at helping businesses modernise their operations and remain competitive over the long term.
PowerUp10K Campaign Targets SME Capability Building
The financing programme forms part of the PowerUp10K campaign, a year-long initiative designed to strengthen SMEs at different stages of development. The ministry has outlined five key performance indicators, including the rollout of up to RM15 billion in low-cost financing this year, an increase from RM10 billion allocated in the previous year.
The campaign also aims to expand capability development within the SME sector. The ministry plans to deploy at least RM100 million to train up to 100,000 entrepreneurs through targeted programmes designed to strengthen management, digital and operational capabilities.
“We target to help 10,000 Malaysian businesses at various levels to scale up and will deploy at least RM100 million to train up to 100,000 entrepreneurs in various capability building programmes.” — Steven Sim, Minister of Entrepreneur and Cooperatives Development
The government also aims to support the SME sector in achieving value-added output above RM750 billion, while helping at least 100 Malaysian companies reach RM100 million in revenue in the medium term.
As of February 2026, approximately RM2 billion in financing had already been approved under the PowerUp initiative. The effort complements other national programmes supporting innovation and advanced technology development, including initiatives to accelerate commercialisation through strategic technology programmes and government-backed investments such as Malaysia’s quantum technology investment fund. It also aligns with broader policy efforts supporting smart greentech and hydrogen innovation as part of the country’s transition to a greener economy.
Recognising Long-Standing Businesses In Penang
The announcement was made during the launch of Heritage Brands of Penang, a publication by Penang Institute documenting businesses that have played a significant role in the state’s commercial and cultural development over more than five decades.
The book, authored by Datuk Tony Yeoh, profiles 59 heritage brands and 21 emerging businesses. It highlights the experiences of entrepreneurs who have sustained their enterprises across generations, offering insight into the challenges and values that have shaped Penang’s long-standing commercial community.
