The initiative was introduced to assist micro, small and medium enterprises in adopting digital solutions through a 50 per cent matching grant mechanism, with businesses funding the remaining 50 per cent. Under the process communicated to stakeholders, once an MSME received approval, made its payment, and the appointed Digitalisation Partner completed delivery, the balance grant portion was expected to be disbursed within approximately one to two weeks upon claims processing.
However, feedback from affected parties indicates that a significant majority of claims remain unpaid even after more than six months, far exceeding the original timeline. More concerning, according to the Association, is the absence of any clear timeline or firm assurance on when these approved claims will be settled.
The delays have caused severe hardship to over 400 qualified Digitalisation Partners, many of whom have already fully delivered approved solutions while absorbing 100 per cent of the implementation costs and cashflow burden. The continued uncertainty over payment is creating serious operational strain and financial pressure on these service providers.
At the same time, more than 10,000 MSMEs that received approval under the programme are also being adversely affected. Many businesses joined in good faith based on the understanding that the Government would honour the approved grant arrangement.
Instead, some MSMEs are reportedly being asked to bear the remaining 50 per cent payment themselves despite prior approval. This has created unexpected financial burdens and exposed businesses to risks such as service suspension, support disruption, late payment interest, debt recovery actions, and potential legal proceedings.
The SME Association stressed that the matter is no longer a minor administrative delay but has become a serious policy execution issue with broader implications for confidence in public programmes, trust in government commitments, and the credibility of national digitalisation efforts.
The Association has urged the Government to take immediate and decisive action, including issuing an official explanation on the status of outstanding claims, providing a firm and transparent disbursement timeline, and accelerating payments, particularly for long-overdue cases. It also suggested considering interim or partial disbursements where necessary.
The Association stated that a programme intended to support MSMEs in their digital transformation must not end up burdening the very businesses it was designed to help and affirmed its readiness to engage constructively with the Government and relevant agencies to achieve a swift and practical resolution.
