PETALING JAYA: With the Overnight Policy Rate (OPR) maintained at 2.75%, small and medium enterprises (SMEs) which account for over 97% of businesses say access to financing remains “uneven.”
SME Association of Malaysia president Dr Chin Chee Seong (pic) said although the stable rate has helped businesses manage costs, many smaller companies still struggled to get loans with others facing lengthy approval processes.
“The government has done well to maintain a rate that supports recovery. But for SMEs, what matters is not just fund availability, but fund accessibility,” he said in an interview.
Chin said Syarikat Jaminan Pembiayaan Perniagaan (SJPP), a government-owned credit guarantee agency, played a crucial role in facilitating SME lending, especially for companies lacking strong collateral.
However, he said more could be done to simplify approval procedures and reduce documentation hurdles to ensure funds reached businesses faster.
“We still hear of cases where SMEs are asked excessive documentation or face long waits despite qualifying under SJPP-backed schemes.
“We hope banks can be more transparent and consistent in applying these requirements,” he said.
Small and Medium Enterprises Association of Malaysia (Samenta) president Datuk William Ng shared the view, saying SMEs with variable-rate loans saw borrowing costs drop by about 20 to 25 basis points following the July rate cut, though gains remained modest.
“A 25-basis-point reduction only frees up about RM1,200 a year for a RM500,000 facility which is not enough to drive expansion. But in today’s razor-thin margin environment, every ringgit counts,” he said.
Ng said stricter know-your-customer and anti-money laundering checks have made loan processing more cumbersome, with some applications cancelled without clear explanation.
“We urge banks to communicate rejections transparently. SMEs have no alternative channel for feedback,” he said, adding that some companies mainly in the construction and export sectors were facing stretched receivables and currency exposure.
He said further OPR cuts would only provide marginal relief. “Confidence, policy consistency and access to talent remain the real drivers of business decisions,” he said.
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said most of its members did not report significant financing issues, describing the current OPR as “appropriate and supportive” of steady growth.
“Challenges mainly affect export-oriented firms and those with US dollar-denominated debt, which face pressures from ringgit fluctuations and widening credit spreads.
“The main problems stem from external uncertainties, such as the US tariffs and a stronger ringgit for companies dependent on export markets,” he said.
Bank Negara announced on Friday that it would keep the OPR unchanged at 2.75%, maintaining a supportive monetary stance amid persistent external headwinds.
