PETALING JAYA: While billions of ringgit in financing have been made available to help small and medium enterprises (SMEs) overcome cash flow pressures, business groups say accessibility and timely approval remain crucial.
This is because assistance may come too late for some SMEs and micro-enterprises, which could be forced to cease operations within the next six months due to rising operating costs, weaker consumer spending and an uncertain global economy.
SME Association of Malaysia president Chin Chee Seong said many SMEs were facing tighter cash flow as a result of higher operating costs, softer consumer spending and global economic uncertainty.
“Based on feedback, many SMEs can probably continue operating for about three to six months if business conditions remain challenging.
“Some micro and small businesses may have even shorter cash reserves.”
Chin stressed that banks and relevant government agencies needed to simplify application procedures, improve transparency and speed up approval processes.
“Financing must not only be available.
“It must also be accessible, affordable and timely,” he said.
Although some SMEs have taken steps to ease their cash flow problems by reducing expenses, delaying expansion plans and restructuring their workforce, Chin said these were only short-term measures.
He added that greater awareness, better financial literacy and continuous improvements to financing platforms would help SMEs better understand the available options and encourage wider adoption.
In April, the government approved up to RM6bil in loans and guarantees for SMEs under two programmes aimed at cushioning the impact of the Middle East conflict.
So far, RM1bil in loans under the SME Stabilisation Relief Facility has been approved by Bank Negara benefiting about 1,500 companies while RM4.9bil in finance guarantees were approved by Syarikat Jaminan Pembiayaan Perniagaan (SJPP).
Small and Medium Enterprises Association (Samenta) president Datuk William Ng said smaller businesses, particularly micro-enterprises, were operating with even tighter financial buffers.
He said their profit margins were being squeezed by a “cost-bunching effect”, including higher compliance costs, increased utility tariffs, rising input costs and softer consumer spending.
“If challenging market conditions persist without liquidity relief, a significant proportion of micro and small firms may face critical operational distress within three to six months.”
Ng said the biggest challenge for SMEs was not only the cost of financing but also the speed and accessibility of obtaining loans.
“Many SMEs tell us that by the time financing is approved, the business opportunity has already passed or their cash flow situation has become even more critical,” he said.
He added that many SMEs continued to face difficulties because traditional lending practices relied heavily on collateral-based assessments.
