Prime Minister Datuk Seri Najib Tun Razak said today subsidies at a 2.0 per cent interest rate will be given under the SME Investment Partner (SIP) programme of the SME Masterplan.

Najib, who is also Finance Minister, said the subsidies are necessary because of the high costs involved and to enhance early stage financing for SMEs.

“Because the subsidies involve sukuk bonds, the costs will be quite high, and in the meeting just now we decided that the government would give out the subsidies at an interest rate of two per cent to identified SME Partners,” he told reporters after chairing the National SME Development Council’s 17th meeting here today.

Under Budget 2015, the government has proposed a RM375 million fund for five years in the form of loans, equity or both, especially at the start-up stage, for the SME Investment Partner programme.

Of the total, RM250 million will come from SME Bank and RM125 million from private investors.

Najib said the draft for the proposed SME Act is being readied and is expected to be tabled in Parliament in the third quarter of next year.

In a statement today, SME Corp said the draft will cover the roles and responsibilities of the government and the private sector, with the former focusing on regulation and monitoring and the former taking a more proactive stance through business associations.

“A consultation session is being held nationwide to get public feedback before the draft for the Act is updated and refined for review by the Attorney General’s Chambers and later debated in Parliament,” it said.

Meanwhile, Najib said SMEs’ contribution towards making Asean an economic community and SME development in Asean member countries are among the main issues to be taken up by Malaysia when it assumes the Asean chairmanship next year.

Earlier, he witnessed the signing of a memorandum of understanding between Sirim Bhd and Fraunhofer Gesellschaft Institute to enhance the country’s SME development by adopting the German ecosystem as well as to cooperate in technology commercialisation and business enhancement.