KUALA LUMPUR: The upcoming Budget 2024 will be especially pertinent to extend assistance and support to micro, small and medium enterprises (MSMEs) to help them ride through the challenging environment and to help realise the Madani Economy vision, RAM Holdings Bhd said.
Group CEO and executive director Chris W.K. Lee said provisions of the Madani Economy framework and the New Industrial Masterplan 2030 indicate that the government is well aware of the need to support MSMEs.
"Access to financing is a primary challenge often cited by firms and the key is to communicate support programmes clearly and ensure onboarding or administrative processes are not overly complex or cumbersome for applicants,” he said in a joint statement with CTOS Data Systems Sdn Bhd today.
According to the joint statement, the RAM-CTOS Business Confidence Index (BCI) declined to 50.4 in the third quarter (3Q) of 2023 from 54.8 in the previous quarter, ending a two-quarter improvement streak, with sentiment remaining positive in the third successive survey.
Nevertheless, the still-challenging operating conditions were likely to have dented business confidence for the next three months.
"The quarter-on-quarter drop in the sales (-6.7 points) and profitability (-7.0 points) sub-indices was particularly pronounced and consistent with slowing demand and further inflationary pressures,” it said.
Commenting on the decline, CTOS Digital Bhd
group CEO Erick Hamburger said the shifting landscape of business sentiment was due to the prevailing challenging operating conditions.
"Within CTOS, we continue to support small and medium enterprises (SMEs) on multiple fronts and we are dedicated to managing business credit risks, bolstering the resilience of SMEs as they traverse these trying times,” he said.
He said CTOS also assisted SMEs in recovering bad debt by reinforcing good payment behaviour to help alleviate cash flow challenges.
"Our efforts have resulted in the successful recovery of over RM1 billion annually, further demonstrating our commitment to SMEs and our dedication to fostering their financial resilience,” he said.
He also said tight cash flow will be a prevalent challenge to micro firms in the next 12 months, more so than to SMEs and corporates.
Of the 165 firms surveyed in 3Q 2023, 64 per cent cited lower income tax rates as the most beneficial measure that Budget 2024 could provide, while 44 per cent wanted utility tariff cuts.
"If introduced, these would help alleviate cost pressures for businesses,” RAM and CTOS said.
It also said micro firms surveyed seem to be particularly vexed by the stringency tied to aid schemes, with around a third of them citing this hurdle. - Bernama
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