KUALA LUMPUR: SME Bank, in partnership with Centre for Entrepreneur Development and Research Sdn Bhd (CEDAR), aims to increase the number of registered social enterprises in Malaysia from 414 to 5,000 by 2025.
In affirming its commitment to supporting social enterprises through development programmes, the bank also targets increasing the percentage of accredited social enterprises from 12 to 20 per cent.
SME Bank group chief corporate strategy officer Datuk Mohammad Hardee Ibrahim said this move is expected to significantly boost Malaysia's social enterprise sector, which has seen steady growth in recent years.
"With SME Bank and CEDAR's continued support, more social enterprises are expected to be established and accredited, contributing significantly to the country's economic growth and social development," he told the New Straits Times in an interview.
Mohammad Hardee said the initiative aligns with the bank's SEMy2030 Strategic Thrust 3, which includes supporting the ideation and creation of new social enterprises and providing capacity development programmes for social enterprises.
"CEDAR has embarked on the Juara Lestari Programme to help onboard and certify more Social Enterprises.
"As part of this initiative, CEDAR will establish a strategic partnership with agencies such as The Ministry of Entrepreneur and Cooperatives Development, National Entrepreneurship Institute, Malaysia Co-operative Societies Commission, Co-operative Institute of Malaysia to develop and finalise the Juara Lestari Scheme programme framework and module," he said.
Further, Mohammad Hardee said social enterprise is an opportunity for entrepreneurs to provide solutions to environmental or social issues and generate profit as they respond.
"Coupled with the expansion of new market‑based business models seeking ways to contribute to economic and societal value, together with the rise of social innovators and entrepreneurs looking to improve the quality of life, we are optimistic that the demand for social enterprise financing will increase as they continue to grow in their business phase.
"Apart from the financing growth, it will also contribute to the increase of awareness and education on environmental and social issues from the customer's perspective," he said.
As per the 2023 Budget announcement, Muhammad Hardee said SME Bank would officially launch one new financing program and two entrepreneur development programs.
He said this includes the Social Enterprise Financing Scheme, Juara Lestari Scheme, and Sustainability Incentive Scheme.
Muhammad Hardee said SME Bank is targeting to approve RM1.8 billion in financing to eligible small and medium enterprises (SMEs) that qualify as per its internal environmental, social, and governance (ESG) screening.
He said SME Bank would continue to be an effective agents of change by advocating and promoting ESG adoption among micro SMEs.
"This will be done through more sustainability-linked offerings with competitive rates such as High Tech and Green Facility (HTG), Low Carbon Transition Facility (LCTF), Young Entrepreneur Fund 2.0 (YEF 2.0) and IBS Promotion Fund 2.0 (IBS 2.0)," he said.