The year 2020 has manifested a new reality for mankind all around the globe. It sounds dramatic but we know this is true. COVID-19 has impacted our lives not only health and social terms but also economically.
In early April, the International Labour Organisation (ILO) said that lockdown measures around the world have affected almost 2.7 billion workers. That amounts to four in five of the global workforce. Their latest analysis shows that the impact of the pandemic far exceeds that of the 2008-2009 financial crisis. In the next three months alone, they estimate that cutbacks equivalent to 195 million full-time workers are expected.
Workers in four sectors that have experienced the most “drastic” effects of the disease and falling production are food and accommodation (144 million workers); retail and wholesale (482 million); business services and administration (157 million); and manufacturing (463 million).
Naturally, Malaysia has also felt the economic impact. The country’s gross domestic product (GDP) is projected to contract by 0.1 per cent to 4.6 per cent this year amid negative impact brought by Covid-19, according to the World Bank. The largest impacted sectors are likely to be foreign direct investment (FDI), commodities, and tourism.
Luckily, the Federal and State Governments have come up with several initiatives to help boost the economy during this tough period.
If your business is affected by COVID-19, here are some assistance options you can take:
1) Wage Subsidy Programme (WSP)
This is a financial assistance programme under the Social Security Organisation (Socso) to help employers continue their company operations during COVID-19 and prevent workers from losing their jobs and sources of income.
Through this programme, wage subsidies are paid to employers for each local employee earning RM4,000 and below for a period of three months only.
The amount of subsidy will depend on the size of the enterprise. Details are as below:
- 75 employees or fewer – RM1,200 per employee per month
- 76 to 200 employees – RM800 per employee per month
- 201 employees and above – RM600 per employee per month. Subsidy limited to 200 employees only.
More information on WSP is available on the Socso website.
2) Employee Retention Program (ERP)
This is another programme under Socso to encourage employee retention. For employers who have implemented no-pay leaves for a period of 1 to 6 months, ERP provides immediate financial assistance to the affected employees.
A total of RM600 is channelled to employers for every employee who earns RM4,000 and below. The employers are then required to credit the payment directly to the affected employees’ account within 7 days.
3) Prihatin SME+
A special Prihatin Grant worth RM2.1bil will be established for eligible micro-enterprises. As part of the Prihatin SME+ Stimulus Package, a grant of RM3,000 will be provided to each company.
A micro-SME, as defined by SME Corp, is a company with a sales turnover of less than RM300,000 or employs less than five people. The micro SMEs must be registered with LHDN.
The government has also abolished the 2% interest rate to 0% under the Micro Credit Scheme amounting to RM500mil under Bank Simpanan Nasional (BSN). The soft loan scheme for micro-enterprises is also extended to TEKUN Nasional with a maximum loan limit of RM10,000 at 0% for each enterprise.
4) State economic stimulus packages
The Selangor State Government has announced a one-off payment of RM500 for all licensed traders and hawkers in the state. As part of their ‘COVID-19 Selangor Concerned Stimulus Package’ they also announced a deferral on land tax payments, a three-month deferment for ‘Smart Sewa’ scheme participants, and a few more incentives.
The Penang State Government has also announced a one-off payment of RM500 for all licensed traders and hawkers in the state. This includes traders in night markets, pasar tani, and food trucks. They also provide RM500 payments to taxi and trishaws and a one-off payment of RM to e-hailing drivers.
Personal Financing may help you if you’re hurting financially during COVID-19 outbreak.Is now a good time to get personal financing? In normal times, you’d consider the interest rate as a primary deciding factor — and you’d compare different products from multiple financial institutions to get the lowest rate. But now, in challenging times and less steady incomes, there are additional questions to ask. We answer those questions in our article here.