CORONAVIRUS | Future Digital, the think tank arm of The National Tech Association of Malaysia (Pikom), has warned that 40 percent of startups and social enterprises will fold by June if help is not forthcoming during the current economic downturn brought about by the Covid-19 pandemic.
"The current stimulus also provides little or no help for technology startups.
"These technology startups do not qualify for most loans as most are less than a year-old without a track record and do not meet the minimum staffing count required," Future Digital chairperson Ganesh Kumar Bangah (photo) said in a statement.
"Should the Movement Control Order be extended for the next few weeks, it would be difficult for many of these companies to survive as they may have insufficient cash flow," he added.
He also pointed out a survey conducted by the Malaysian Global and Innovation Centre (MaGIC) in March which indicated fewer than three percent of startups will survive if the Covid-19 pandemic drags on for the next 12 months.
Ganesh recommended the government to provide immediate and medium-term liquidity and funding to technology startups.
Among others, he suggested that RM200 million from the allocated RM4.5 billion to assist small and medium-sized enterprises (SMEs) under the current stimulus package is used to help technology companies and startups.
He said the money can be managed by funding agencies such as the Malaysia Venture Capital Management Berhad and Malaysia Debt Ventures, in cooperation with other government agencies such as Malaysia Digital Economy Corporation (MDEC) and MaGIC which has strong roots in the tech and startup community.
"The funding agencies should also work with private funding entities such as venture capitalists, angel investors and crowdfunding platforms.
"These government funds should be provided on a matching basis to companies that can raise funding from these private funding entities," he said.
Citing the Department of Statistics, Ganesh said Malaysia's digital economy contributed RM267 billion or 18.5 percent of gross domestic product in 2018.
“The Malaysian startup ecosystem contributed a total of RM3.4 billion to the nation’s GDP from 2008 to 2016 and is projected to reach RM30.8 billion by 2030, giving it a significant role in nation-building.
"Within the same period, the digital ecosystem had also created 80,600 new full-time jobs, attracted investment of RM1.3 billion in private and foreign funds and produced permanent recurring income effects on the economy," he added.
Pikom is an association representing the information and communications technology industry in the country.
Muhyiddin is expected to announce additional stimulus measures later today to aid SMEs.
This comes after industry players complained that the initial RM250 billion stimulus plan, announced on March 27, was insufficient to help SMEs and to stave off mass job losses.
To combat the coronavirus, the country has gone into a partial lockdown since March 18.
The MCO was supposed to end on March 31 but was extended until April 14.
Under the MCO, all non-essential businesses and services must close while people are only allowed to leave their homes for pressing reasons such as to restock food supply.
The measures have brought a large section of the country's economy to a standstill.
As of noon yesterday, Malaysia recorded 3,662 Covid-19 cases with 61 deaths.
Globally, 1.27 million people have been infected and 69,459 have died. - Mkini
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.