Summary of Budget 2026 Malaysia
- Budget 2026 Announcement: Announced Friday, 10 October 2025, at 3:00 PM.
- SME and Entrepreneurship Support: Budget 2026 aimed to boost SME digitalization, green investments, and financing access for small businesses, women, and youth entrepreneurs.
- RM10B Financing Boost: RM10 billion allocated through SME Bank, BPMB, TEKUN, AIM, and SJPP to enhance SME funding, debt restructuring, and business growth.
- Digitalization & Innovation Grants: RM150 million for SME digital adoption, RM200 million for innovation commercialization, and a “Made by Malaysia” certification to promote local excellence.
- Startup & Venture Funding: RM750 million venture capital from KWAP and Khazanah, RM55 million via Cradle Fund, and new incubators for AI and semiconductor startups.
- Export & Global Expansion Support: EXIM Bank financing raised to RM10 billion, RM50 million Global SME Bridge, and MyCIF expansion to strengthen cross-border trade and ECF/P2P financing access.
- Inclusive & Sustainable Growth: RM250 million for women entrepreneurs, RM150 million for youth programs, RM100 million halal financing (plus RM2B guarantees), RM3B green fund, and full e-Invoicing rollout by mid-2026.
List of Budget 2026 Malaysia Initiatives for SMEs
1. RM 10 Billion in Financing and Guarantees for SMEs
SMEs will have greater access to capital through a record RM 10 billion funding pool allocated across various agencies.
Key initiatives:
- SME Bank Business Viability Fund (RM 2 billion): Helps businesses restructure debts and stabilize operations post-pandemic.
- BPMB Green Investment Fund (RM 3 billion): Supports SMEs adopting energy-efficient or green technology.
- SJPP Guarantee Ceiling Raised to RM 60 billion: Improves loan access for SMEs and mid-tier companies.
- TEKUN and AIM Microfinance (RM 500 million): Provides micro-financing for 200,000 entrepreneurs.
- Bumiputera Entrepreneur Transformation Programme (RM 600 million): Strengthens capacity and market access.
FS Insight: With stronger government guarantees, SMEs can now leverage alternative financing platforms like Funding Societies Business Term Loan to bridge cash-flow gaps or expand operations.
2. Accelerating SME Digital Transformation
The Government continues its digitalization push through MDEC’s GoDigital MADANI initiative.
- RM 150 million in grants for 50,000 SMEs to adopt e-commerce, cloud, and digital tools.
- Innovation Commercialisation Fund (RM 200 million): Bridges the R&D-to-market gap for local products.
- “Made by Malaysia” certification: Recognizes home-grown SMEs for product excellence and sustainability.
Also read: How Digitalization Helps SMEs Grow in Malaysia
3. Stronger Startup and Venture Ecosystem
Budget 2026 unlocks new funding for startups and innovators:
- RM 750 million venture capital funds via KWAP and Khazanah.
- Cradle Fund Equity Investment Programme (RM 55 million): Connects GLCs with private-sector startups.
- SemiconStart Incubator: Provides mentorship and global financing access for tech startups in AI and semiconductors.
For startups looking to grow faster, consider the Micro Financing programme by Funding Societies for quick working-capital support.
4. Empowering SME Export Growth
Malaysia is doubling down on regional and global trade opportunities for SMEs.
- EXIM Bank financing capacity was raised to RM 10 billion to support SME exporters.
- Global SME Bridge (RM 50 million): Links Malaysian firms with ASEAN and GCC partners.
- MyCIF expansion (RM 30 million): Supports MSMEs through equity crowdfunding (ECF) and peer-to-peer (P2P) financing platforms like Funding Societies.
With cross-border trade simplified, Malaysian SMEs can now scale regionally with greater financial flexibility
5. Support for Women and Youth Entrepreneurs
Inclusive entrepreneurship remains a core focus of the MADANI agenda.
- Women Entrepreneur Scheme (RM 250 million): BSN and MARA financing for women-led SMEs in retail, fashion, and food processing.
- Youth MADANI Programme (RM 150 million): Entrepreneurship grants and digital skills training for young founders.
6. Advancing Halal and Green Industries
Malaysia continues to position itself as a global halal and sustainability hub.
- SME Bank Halal Financing (RM 100 million) for MSMEs in the halal supply chain.
- SJPP Halal Guarantees Doubled to RM 2 billion.
- BPMB Green Investment Fund (RM 3 billion): Encourages renewable and eco-friendly projects.
- Perak Halal Industrial Park (RM 124 million): Creates export opportunities for SMEs nationwide.
7. Simplifying Compliance through E-Invoicing
By mid-2026, e-Invoicing will be fully implemented, reducing administrative burdens and enhancing transparency for businesses.
The LHDN Digital Audit Hub will assist SMEs in adopting these systems for domestic and cross-border transactions.
Learn how e-Invoicing affects SMEs in our guide: e-Invoicing Malaysia Guide
When Will Budget 2026 Be Announced?
Budget 2026, also known as the Fourth MADANI Budget, was presented on Friday, 10 October 2025, at 3:00 PM.
The announcement was broadcast live across national media and could also be watched online at the official portal: MOF
You could also tune in to live coverage on local TV channels such as RTM, TV3, and Astro Awani.
Live Streaming Links:
- RTMKlik: https://rtmklik.rtm.gov.my/
- BERNAMA LIVE: https://www.facebook.com/bernamaofficial
- Astro Awani LIVE: https://www.astroawani.com/video-terkini
How Budget 2026 Supports SMEs
Budget 2026, the fourth in the MADANI Budget series, is expected to shape Malaysia’s economic direction for the coming year with a focus on targeted subsidies, SME growth, digitalization, and community development. This year’s Budget aims to balance fiscal discipline with social support, ensuring that assistance reaches those who need it most while helping businesses, especially SMEs and MSMEs, strengthen competitiveness, adopt technology, and drive long-term national growth.
Tabled on 10 October 2025, Budget 2026 outlined how the government plans to sustain economic recovery, empower entrepreneurs, and create inclusive opportunities for Malaysians across all sectors.
Summary of the Pre-Budget 2026 Statement
The 2026 Budget will continue to uphold the principles of the Ekonomi MADANI framework, built on three main pillars:
1. Raising the Nation’s Growth Ceiling
- Generating multiplier effects across economic value chains
- Acting as a strategic driver for Malaysia’s industrial transformation
- Realigning incentives to enhance investment attractiveness
2. Lifting the People’s Living Standards
- Labour market reforms to create quality employment opportunities
- Strengthening socio-economic assistance mechanisms for a dignified livelihood
- Moving towards an equitable and sustainable healthcare system
- Reforming the education sector to build an inclusive, future-ready economy
- Bridging the urban–rural development gap
- Empowering all groups to participate in an expanding economy
3. Driving Reform and Good Governance
- Strengthening integrity and fiscal governance
- Modernizing public finance through technology
- Enhancing GovTech and public service delivery
- Reforming the civil service for a future-ready government
Official Pre-Budget Statement 2026 (PDF)
Main Focus Areas of Budget 2026
- Targeted Subsidies
Transitioning from broad-based subsidies to more targeted assistance to reduce wastage and ensure support reaches those who need it most. - Human Capital and Public Sector Development
Initiatives such as APEL learning programs by INTAN and GlobalNxt University aim to modernize the public sector and close skill gaps among civil servants. - Infrastructure and Community Development
Emphasis on rural development, especially in Sabah and Sarawak, as well as tourism, SMEs, and inclusive support for groups such as senior citizens, OKU, Orang Asli, Bumiputera, women, and youth. - Rahmah Cash Aid and Direct Support for the People
Continuation of the Sumbangan Tunai Rahmah (STR) programme and other targeted assistance to ease the cost of living for low and middle income households. The initiative ensures direct cash transfers reach eligible groups efficiently, providing immediate financial relief and supporting domestic spending within local communities
Malaysia’s Economic Overview 2025
- GDP Growth: The economy grew 4.4% year-on-year in Q1 2025, driven mainly by private consumption and investment, in line with Bank Negara Malaysia’s forecast of 4.0% to 4.8% growth for the year (Bank Negara, Reuters Economic Report).
- Inflation: Headline inflation remained low at around 1.1% in June 2025, keeping Malaysia among the countries with the lowest inflation rates in ASEAN (Trading Economics).
- Employment: The unemployment rate dropped to 3.0% in May 2025, maintaining near full employment levels for several consecutive months (Trading Economics).
- Fiscal Deficit: The government expects the fiscal deficit to narrow to 3.8% of GDP in 2025, consistent with its medium-term fiscal consolidation target under the MADANI framework (MOF).
Summary of Budget 2025 Highlights for SMEs
Loans and Financing for MSMEs
RM40 billion was allocated for MSME loans through government agencies, including RM3.2 billion in microfinancing from TEKUN and BSN. This supports small traders, OKU communities, and Bumiputera entrepreneurs.
Impact: Easier access to capital helps small businesses invest in automation and digital tools.
Financing Guarantees by SJPP
SJPP provided RM20 billion in financing guarantees, with RM5 billion earmarked for Bumiputera SMEs.
Impact: Makes it easier for SMEs to secure funding despite limited collateral.
BNM Loan Funds for SMEs
Bank Negara Malaysia allocated RM3.8 billion to help SMEs adopt automation, digitalization, and sustainable practices.
Impact: Supports efficiency, cost savings, and long-term growth.
Digitalization Matching Grants
RM50 million was provided through BSN to help MSMEs accelerate digital adoption.
Impact: Encourages small businesses to automate operations and improve productivity.
Upgrading Facilities for Small Traders
RM100 million was set aside to upgrade hawker stalls and public markets nationwide, including in Sabah and Sarawak under the Tamu Desa initiative.
Impact: Provides better trading environments and supports income growth.
Support for Women and Youth Entrepreneurs
RM650 million was allocated to help women and youth start or expand their businesses.
Impact: Promotes inclusivity and encourages entrepreneurship among key demographic groups.
Insurance and Takaful for Micro-Entrepreneurs
RM5 million was allocated for insurance and takaful coverage for micro-entrepreneurs and delivery riders.
Impact: Offers financial protection for small businesses facing unforeseen risks.
Support for Bumiputera Entrepreneurs
RM1.3 billion was allocated to strengthen Bumiputera contractors, while RM800 million went to MARA and PUNB.
Impact: Expands Bumiputera participation in national development projects.
Funding for Startups
RM1 billion was provided under the National Fund-of-Funds, including RM65 million from Cradle Fund, to support high-potential startups.
Impact: Improves access to capital and fosters innovation.
Creative and Social Entrepreneurs
RM30 million was channeled through the MADANI Creative Youth Programme to train creative entrepreneurs in digital media and short film production.
Impact: Strengthens Malaysia’s creative industry and supports youth-led ventures.
Export Market Support
RM1 billion was allocated for the Mid-Tier Companies Programme, plus RM750 million via EXIM Bank and RM40 million to MATRADE for export promotion.
Impact: Helps Malaysian SMEs expand globally with financial and marketing support.
To find out more about the Budget 2025 click HERE
What to Expect in Budget 2026
Economists expect Budget 2026 to:
- Continue targeted subsidy reforms and fiscal consolidation
- Focus on digitalization, automation, and sustainability for SMEs
- Strengthen access to financing for micro, women-led, and youth-led businesses
- Introduce tax incentives for companies investing in green and ESG technologies
- Expand digitalization grant programmes under the MADANI agenda
Budget 2026 FAQ
Sources:
- Bank Negara Malaysia (BNM) – Quarterly Bulletin Q1 2025
https://www.bnm.gov.my/-/qb25q1_en_pr - Reuters – Malaysia growth near forecast; central bank flags tariff risks (August 2025)
https://www.reuters.com/world/asia-pacific/malaysia-growth-near-forecast-second-quarter-central-bank-flags-tariff-2025-08-15 - Trading Economics – Malaysia Inflation Rate (June 2025)
https://tradingeconomics.com/malaysia/inflation-cpi - Trading Economics – Malaysia Unemployment Rate (May–June 2025)
https://tradingeconomics.com/malaysia/unemployment-rate - Ministry of Finance Malaysia (MOF) – Fiscal Policy Committee Statement (2025)
https://www.mof.gov.my/portal/en/news/press-release/fiscal-policy-committee-2025 - Official Malaysian Budget Portal (MOF) – Budget 2026 Announcement and Live Stream
https://belanjawan.mof.gov.my - RTM Klik – Live Budget Coverage
https://rtmklik.rtm.gov.my/ - BERNAMA Official Facebook Live
https://www.facebook.com/bernamaofficial - Astro Awani – Live Video Stream
https://www.astroawani.com/video-terkini - MOF Malaysia – Pre-Budget 2026 Statement (PDF)
https://mof.gov.my/portal/pdf/Kenyataan-Pra-Belanjawan-2026.pdf
