KUALA LUMPUR: Small and medium enterprises (SMEs) must end delayed payments due to its affect on the economy, said Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong.
He said a survey by the SME Media Group and Inti International University showed late payment was a very common problem, with 73% of business operators saying it was a Malaysian business culture.
Dr Wee said it was a stumbling block for many SMEs, with some waiting up to 94 days to get paid.
He said SMEs lacked the voice to demand what was simply owed to them, while being unable to get credit from suppliers.
“They then face cash flow problems. This is bad for SMEs, the millions of workers they employ, their families and the economy as a whole,” he said at the Malaysia SME Economics Conference Series 2017.
Dr Wee said findings from the latest RAMCI Industry Debts Turned Cash (RAMCI i-DTC) indicators showed the majority of companies granted a total of 30 days credit terms to their customers.
Dr Wee said he hoped more companies will renew their Trade Credit Pledge to pay their SME partners on time as part of their corporate social responsibility.
He also urged businesses to make full use of digital financing to compete with the other SMEs globally.
Did you find this article insightful?