The Malaysian Industrial Development Finance Bhd (MIDF) has signed a memorandum of understanding (MoU) with the Malaysian Investment Development Authority (MIDA) to offer small and medium enterprises (SMEs) and mid-tier companies (MTCs) the opportunity to benefit from MIDA’s Smart Automation Grant (SAG).
MIDF group managing director Datuk Charon Wardini Mokhzani said the MoU underlines the close relationship between MIDA and MIDF and their joint commitment to support companies that aspire to automate and modernise.
“As a nation, we need to increase productivity and value-add Malaysian businesses to higher levels in our path towards a high-income nation. Investing in automation and digitalisation is one way to achieve this,” he said in a statement today.
According to the statement, the collaboration aimed to promote and facilitate the SAG’s utilisation through a strategic alliance.
“Under this alliance, MIDA will provide grants for qualified companies, whereas MIDF will offer financing to these companies for their remaining expenses.
“Additionally, qualified companies already enjoying financing facilities from MIDF may lower their financial commitment upon successful application for SAG,” it said.
It said the SAG initiative, introduced in the National Economic Recovery Plan (PENJANA) with an initial allocation of RM100 million, was launched by the Senior Minister and Minister of International Trade and Industry (MITI) on Dec 2, 2020.
MIDF said the grant is awarded to eligible SMEs and MTCs on a matching basis or 50% of total eligible expenditures, up to a maximum grant cap of RM1 million per company.
“Based on the encouraging response for SAG, the government announced an additional RM50 million fund under the Strategic Programme to Empower the People and Economy (PEMERKASA) to drive more SMEs and MTCs to improve their operation and production through automation and digitalisation,” it said.
It said SMEs and MTCs that have been undertaking manufacturing or services activities in the past 12 months are eligible to be considered for SAG.
“The automised machine, equipment or software purchased through this grant must be utilised directly in the company’s value chain in order to qualify for the incentive,” it said
It said the improvements in two components — productivity and efficiency — will be assessed on a range of criteria such as reducing unskilled workers, man-hours, defect rate and the increase in production volume.
“Interested companies are advised to submit applications to the various industries and services divisions in MIDA,” it added.
- The Edge Markets