PSFS Allocated RM20 Million to Develop Malaysian Franchises

An allocation of RM20 million (20 million Malaysian ringgit) for the PERNAS SME & Franchisor Financing Scheme (PSFS) under Malaysia’s Budget 2027 focuses on the development needs of Malaysian franchise businesses. The financing covers start-up and working capital, including opening outlets, refurbishing premises, purchasing equipment and securing initial stock.

Financing to open and run a business

Malaysia’s Minister of Domestic Trade and Cost of Living, Datuk Armizan Mohd Ali, announced the allocation at a press conference following the launch of Tealive Sparkling Prebiotic Tea Soda in Kuala Lumpur on 5 November 2026, according to Bernama, Malaysia’s national news agency.

He said the PSFS allocation was intended to help develop Malaysian franchise businesses. Its stated scope covers several elements of setting up a business, from premises and equipment to the stock needed at the outset.

For the franchise community, these details matter because financing needs are not confined to a single purchase or stage of development. Opening an outlet, for example, needs to be considered alongside preparing the premises, equipping the business and securing initial supplies. Working capital is a separate component also mentioned in the announcement.

The RM20 million figure is the allocation for the scheme as a whole, not a stated financing amount for each applicant. Entrepreneurs planning to expand should therefore distinguish between the total allocation and their own business needs before putting together a financing plan.

Long-term viability is a development priority

Armizan also stressed the need to strengthen the long-term viability and competitiveness of Malaysian franchises. The aim is not simply to help brands compete in Malaysia, but also to improve their ability to enter overseas markets.

He said the Ministry of Domestic Trade and Cost of Living (KPDN), through Perbadanan Nasional Berhad (PERNAS), would continue to step up capacity-building for Malaysian franchises. These efforts place particular emphasis on micro, small and medium-sized enterprises (MSMEs), helping them become more competitive and broaden their markets.

This emphasis on capacity and long-term viability places financing in a wider context. For brand owners, plans to raise capital should ideally be accompanied by an assessment of their ability to manage additional outlets. Prospective franchisees, meanwhile, should examine the cost of preparing premises alongside the funding needed to run the business once it opens.

These are business planning considerations, not announced PSFS conditions. Nevertheless, separating opening costs from operating requirements can help entrepreneurs build a clearer picture of how they would use capital when assessing financing options.

Market expansion complements capital support

In the same statement, Armizan linked year-on-year growth in franchise registrations to government efforts to expand the market for Malaysian products. Among the initiatives mentioned was the Jom Beli Produk Malaysia (JOM MALAYSIA) campaign, which encourages consumers to buy Malaysian products and is run in collaboration with various partners.

Financing support and market expansion initiatives address two different needs. PSFS is aimed at business development through the stated capital components, while JOM MALAYSIA was mentioned in the context of widening the market for Malaysian products.

Entrepreneurs should assess the two separately in their planning. Access to capital does not remove the need to understand customers, while market opportunities must be matched by the ability to supply products and operate outlets. Such an assessment is consistent with the minister’s emphasis on long-term viability, rather than simply increasing the number of businesses.

Entrepreneurs should also avoid treating the funding announcement as automatic approval for financing. A more practical approach is to list the intended uses of the funds first, then seek clarification from PERNAS on eligibility, the application process and financing terms before making financial commitments.

Tealive illustrates the reach of Malaysian brands

At the event, Armizan cited Tealive’s growth as evidence of Malaysian brands’ ability to expand and compete internationally. As of October 2026, Tealive had 800 outlets in Malaysia and 82 franchise outlets across nine countries.

Tealive also introduced four new varieties of ready-to-drink beverages based on tea and fruit at the event. The product launch provided the setting for the announcement of government support for Malaysian franchise development.

Tealive’s example illustrates the kind of international reach Armizan referred to, but does not mean every brand needs to follow the same scale or route of expansion. For MSMEs, decisions to open new outlets still need to reflect their own financial position and operational capabilities.

Practical takeaway: Use the announced scope of PSFS as an initial guide to budgeting for premises, equipment, stock and working capital. Confirm the scheme’s details with PERNAS before relying on this financing as the basis for a decision to open an outlet.