With barely 10 days to go to Budget 2024, Malaysia’s Small and Medium Enterprises (SMEs) sector hopes that the Malaysian government will provide real solutions to address issues hampering its growth.
SME Association of Malaysia national secretary-general, Chin Chee Seong, said the sector has not been able to get back on track three years since Covid-19 wreaked havoc on the global economy.
“We conducted a survey involving 100 SMEs in August, this year. Fifty per cent of them are not doing well. They are facing cash flow, and other financial problems,” said Chin.
“The remaining 20 per cent are doing moderately okay, and only 20 per cent say they are satisfied with their businesses.”
Last month, Deputy Finance Minister Steven Sim said empowering SMEs and strengthening the middle class were the key focuses in preparing Budget 2024.
SMEs have been recognised as the engine of Malaysia’s economy. Data, as of December 2021, indicated more than 1.15 million SMEs, nationwide. The sector also contributes to more than 38 per cent, or over RM500 billion, to the country’s gross domestic product (GDP).
Chin said those in the industry are no doubt looking forward to the assistance from the government.
“The economy has not been good. In the past two months, most retail businesses, including those in the food and beverage industry, have been feeling the pinch. We’ve been talking about recovery plans for the industry for the past three years, but things appear to be the same.”
He said it was also not wise to offer loan restructuring to SMEs, as such a facility also means having to pay additional legal and stamping fees.
“There is also no point in offering tax incentives and rebates to those in the sector if the majority of them are not generating enough income.”
The authorities, Chin said, must go to the ground to understand the real problems affecting those in the sector.
“What is important is not the type of aid that will be rolled out under Budget 2024. Instead, what those in the sector want to know is, is there a proper action plan being put in place to help SMEs?” he said.
“While we understand the nation’s debt stands at RM1.5 trillion, there will be a ripple effect on SMEs if the government does not spend, and stimulate the economy.”
Chin said if the number of tourists entering Malaysia does not increase, for example, those in the hospitality, food, and beverage, and transport industry, will suffer.
“We also hope that the government will take care of local businesses and investors. There should not be instances of special privileges being accorded to selected foreign companies setting up bases in Malaysia, but not the others.
“Be fair to all. Take care of everyone and help locals invest in Malaysian businesses,” he said.
