How to Benefit From MDEC’s SME Digitalisation Grant?
Did you know? Small to medium enterprise (SME) owners such as yourself can now apply for a grant of up to RM5,000.
You may be wondering how the SME Digitalisation Grant could be helpful to your business, especially during MCO when customers mainly shop from home. Before we get to that, let’s learn more about what MDEC’s SME Digitalisation Grant really is.
What is the MDEC Digitalisation Grant?
In accordance with Budget 2020, the government saw the opportunity to help SME business owners thrive despite the current MCO restrictions through SME digitalisation initiatives. In its efforts to actively encourage more local businesses to move rapidly into the technology sphere, the government has also allocated an additional RM150 million under the SME Digitalisation Grant scheme in Budget 2021.
The government grant will provide a 50% financing of up to RM5,000 per company for acquiring digital marketing solutions. This matching grant will accumulate a total of RM500 million over five years and is limited to the first 100,000 successful applicants.
MDEC, on the other hand, is responsible for ensuring local businesses receive the right tools and solutions to help them digitalise their business operations.
Additionally, the government has identified seven key digitalisation areas that should be adopted by SMEs, which are:
- Digital Marketing and/or Sales
- Electronic Point of Sales (e-POS) Systems
- HR Payroll Systems/CRM
- Remote Working
- ERP/Accounting and Tax
Who is eligible for the SME Digitalisation Grant?
The main aim of the grant is to help traditional businesses transform with digital technologies. However, new businesses are not eligible. Applicants must meet the following criteria:
- Registered under relevant Malaysian laws
- 60% Malaysian owned
- Has been in operation for at least six months
- Minimum annual sales turnover of RM50,000
If your company meets the criteria mentioned above, you can now apply by following these steps:
Step 1 – Select up to three different services from the approved list of vendors. Maxis is an approved vendor and can assist with your eCommerce and retail needs.
Step 2 – Complete the application form and submit it with the necessary documents to your nearest BSN or SME Bank branch.
Step 3 – Once approved, pay 50% of the invoice amount to the vendor.
Step 4 – Submit proof of payment to the respective bank.
Step 5 – The bank will then pay the remaining 50% balance directly to the service provider.
What are the documents needed?
- A copy of the Digitalisation Initiative application form.
- A copy of the identity card or passport of the company’s directors or partners, whichever is applicable.
- A copy of business registration licenses (CCM, Form A/B, Form 24 & 49, and M&A or any similar forms under the Companies Act 2016).
- A copy of your company’s bank statement of the last two (2) months.
- The invoice and service agreement from the approved list of vendors under MDEC.
- Additional documents that may be requested by the bank (if any).
How the grant works
Let’s take a look at three scenarios to further understand how you can make the most of the government grants for SMEs.
Scenario 1: Spending at the limit
An SME contacts three vendors and applies for three different services. One service costs RM5,000, the second RM3,000 and the third RM2,000 for a total of RM10,000, thus getting the full RM5,000 grant.
Scenario 2: Spending above the limit
An SME spends RM12,000 on a solution and pays RM7,000 instead of RM6,000 (50%), as the grant amount is capped at RM5,000. Here, the SME has also reached the full grant limit for digital financing.
Scenario 3: Spending below the limit
An SME buys a solution that costs RM4,000. The company needs to pay half the sum (RM2,000) with the rest matched by the grant (RM2,000). In this case, the SME is leaving RM3,000 untouched.
General questions about MDEC SME Digitalisation Grant
How many applications can I make for the grant?Each organisation is allowed one application, but each application covers up to three digital solutions.
When is the deadline for application?The grant period starts from 17 February 2020 for five years or when 100,000 applicants have been awarded.
Are there any fees imposed?The grant application is free, but successful applications will need to pay 50% of the cost of the solution to get the matching grant.
What other terms should I be aware of?
- SMEs are responsible for the training and implementation of the solutions.
- The bank may request proof of activation, so it’s best to have that ready.
- SMEs are strictly prohibited from engaging in illegal activities.
- Subscription-based digitalisation services are also covered by the grant but will only cover the first year and not subsequent years.
And that’s it! You are now ready to digitalise your business.
If you are unsure and need more information, feel free to contact our Maxis Business to help you on your digitalisation journey at 1700-818-881.