KUALA LUMPUR, 10 October 2026 – The MADANI Government has reaffirmed its commitment to micro, small and medium enterprises (SMEs) by declaring 2027 as the Year of SMEs Malaysia under Budget 2027.
Minister of Entrepreneur and Cooperatives Development Steven Sim Chee Keong said Budget 2027 focuses on three key areas: easing access to financing, reducing business costs, and creating more market opportunities.
“Budget 2027 focuses on three main priorities: facilitating access to financing, reducing business costs, and opening up more market opportunities. Accordingly, 2027 is being designated as the Year of SMEs Malaysia,” he said in a statement today.
On financing, the government is increasing loan facilities and financing guarantees for businesses, including SMEs and mid-tier companies, from RM50 billion in 2026 to RM57 billion in 2027. This marks the highest allocation ever for the SME sector.
To ease business costs, the income tax rate for SMEs will be reduced by up to two percentage points. The measure is expected to benefit around 300,000 SMEs, with tax savings of up to RM6,000 a year.
The government is also providing RM1 billion in export financing through Bank Pembangunan Malaysia Berhad (BPMB) and RM60 million through MATRADE to help local companies penetrate international markets.
These measures are aligned with the Ministry of Entrepreneur and Cooperatives Development’s (KUSKOP) ABCD framework, which covers Productivity Shift, Simplified Bureaucracy, Capital Access, and Market Access.
Steven Sim also welcomed the exemption for SMEs with annual sales below RM50 million from the minimum wage increase from RM1,700 to RM2,000 starting June 2027. He further supported the proposed introduction of the E-Commerce Bill to ensure fair competition for local traders.
KUSKOP itself has been allocated RM1.028 billion in 2027 to strengthen entrepreneur and cooperative development. At the same time, Budget 2027 provides financing facilities, tax incentives, and market opportunities for SMEs through various government agencies and government-linked investment companies (GLICs).
“This whole-of-government approach ensures that efforts to empower SMEs are carried out in an integrated manner. KUSKOP will strengthen cooperation with relevant ministries and agencies so that entrepreneurs can access suitable facilities without being hindered by administrative boundaries between agencies,” he said.
Key support measures include RM25 billion in domestic investment by GLICs, RM30 million to help 4,000 SMEs adopt AI and automation, RM6.6 billion in microfinancing, RM32 billion in financing guarantees, and RM7.5 billion in government procurement opportunities for Bumiputera contractors in grades G1 to G4.
Other initiatives include a 50 per cent rental discount for more than 10,000 small traders renting DBKL premises throughout 2027, accelerated capital allowances, and matching grants of up to RM5,000 for first-time halal certification.
KUSKOP expressed appreciation to Prime Minister Datuk Seri Anwar Ibrahim for continuing to prioritise SMEs in Budget 2027.
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