Rafizi: New plans for bumi businesses controversial but needed

Economy Minister Rafizi Ramli is confident that awarding credit funds instead of direct grants to bumiputera small and medium enterprises (SMEs) will create a sustainable future.

Rafizi believes the shift in strategy, combined with other assistance from related government agencies, will benefit dedicated bumiputera entrepreneurs.

He said the new system will enable these businesses to expand faster and match their financial capabilities, fostering more sustainable growth.

Credit funds raise capital from investors, but are used to make loans rather than buying equity.

“(This method) can be a bit controversial. Different people have different views, but the proof is in the pudding.

“I hope more bumiputera businesses will benefit from this and grow.

“Then, people will know this ‘rough’ way is needed in the bumiputera (business) ecosystem,” he told reporters after attending the announcement of three bumiputera-mandated agencies’ realignment under his ministry in Cyberjaya.

Building a cohesive ecosystem

In his opening speech, he stated that the three agencies - Yayasan Peneraju, the Bumiputera Agenda Steering Unit (Teraju), and Ekuiti Nasional Berhad - would play a special role in the bumiputera entrepreneurial ecosystem.

Their roles include increasing value creation, expanding the scale of bumiputera companies, and driving bumiputera economic involvement through corporate equity ownership.

Rafizi noted that these agencies would focus on assisting the growth of bumiputera SMEs, which face numerous challenges before they can upscale.

The agencies will also help address issues requiring capital and expertise.

While the plan might not be entirely new, Rafizi emphasised that its specific focus sets it apart from past initiatives. He mentioned that Teraju’s funds were previously spread thin across micro and large businesses, resulting in a lack of focus.

The collaboration between the three agencies aims to build a cohesive ecosystem and ensure that grants come with the requirements, skills, and moral support.

Rafizi acknowledged that it might take time to convince the bumiputera ecosystem, but the goal is to ensure that more bumiputera entrepreneurs benefit from the new focus plan.

As businesses repay their credits, he added that the money will be rolled over and reused by other companies, creating a self-sustaining system. - Mkini