Take heart and soul,
Work on your thing,
Form your mould,
Microfinance incoming.

If you are a small business or budding entrepreneur, take heed. The government has recently announced that it will increase the allocation by RM6 million for its iTekad program, bringing it to RM10 million.

The amount might seem small but for many of us, any small amount will help us in launching our enterprises and start-ups. Here are the 5 essential things that you need to know about iTekad!

#1: iTekad is available for low-income entrepreneurs mainly

iTekad was originally established during the pandemic in 2020 by Bank Negara Malaysia to support and help small businesses and entrepreneurs in their times of need.

Since then, the scope and objective have been enlarged to assist low-income entrepreneurs and small businesses in strengthening their financial management and business acumen to generate sustainable income

Low income here is generally defined as the B40 income group, where households in this category earn less than RM4,800 per month.

However, depending on the financial institutions, they will have different requirements and criteria regarding who qualifies for iTekad. This brings us to the next point.

#2: Currently, 11 financial institutions are part of the iTekad program

That’s right! A total of 11 financial institutions are part of the iTekad program and offer their own programs that cater to different target groups within low-income entrepreneurs. For example, Asnaf, B40, F&B sector and gig economy, pre-franchise business, students, agriculture sector, and single mothers.

This includes the likes of Ambank, Bank Islam, Bank Muamalat, CIMB, Public Bank, RHB, BSN, Agrobank, SME Bank, and Maybank. For more in-depth information, please see the table below from BNM.

#3: Provides seed capital, microfinancing and structured training

In terms of how you can get assistance, iTekad will provide you with seed capital, microfinancing, and structured training. If you are unsure what these things mean, here’s a brief rundown.

Seed capital is defined as the money used to grow and develop new businesses and products at the initial stages. Think of it like the money you need to start your business from day one.

Microfinancing is loans or credit lent to people that are small in quantity and typically covers low-income households or businesses. Typically, small businesses have difficulty obtaining financing from big banks.

Structured training is more unconventional. Most financing programs don’t provide this but iTekad is creative in providing both financing and training. It covers upskilling and mentoring, which cultivates the participants’ business skills and lead to more sustainable income generation.

#4: It has had successes so far since 2020

Since 2020, the program has mobilized RM40 million in funding and has had successes for its participants. Currently, the program supports about 3,000 people and accounts for about 0.4% of the total microenterprises in Malaysia (Total: 6947,60; SME Corp Annual Report 2019).

According to statistics from BNM, more than 40% of its participants have managed to generate incomes that are higher than RM4,000 per month.

Furthermore, 70% of them have enough capital to employ at least one worker. 90% of them can also run online sales and marketing, and use e-payments for their business transactions.

#5: Government plans to increase the number of iTekad participants and financial institutions

Considering the relative success so far, the government has plans to increase the number of iTekad participants and banks to help implement the program.

Moving forward, the government hopes that the number of participants can increase to 4,000 from 3,000 currently. Meanwhile, financial institutions’ involvement is projected to rise to 20, which will increase the funding and scope of the iTekad program.

Conclusion

If you are struggling to start up your business, use this information about iTekad to help you with your finances. No one starts off their business, with everything in place but you can use microfinancing to get you there and hopefully build a successful business.