Better way to strengthen entrepreneurship support

BUDGET 2027 includes RM6.6bil in microfinancing and RM200mil under the Sejahtera Madani grants to support small businesses, vulnerable groups, youths, gig workers and entrepreneurs. These initiatives recognise the financial and resource constraints that can prevent entrepreneurs from improving their operations.

For a food seller, better equipment could reduce wastage. For a tailor, an efficient sewing machine could increase production. For a neighbourhood retailer, additional working capital could help maintain inventory.

Such improvements matter, particularly when limited resources restrict business development. But does receiving more capital necessarily make the business financially stronger?

Consider a small restaurant that obtains financing to expand its operations. Sales may increase, but so might operating expenses. Without proper pricing, cost management and cash flow planning, the owner could end up working harder without earning significantly more.

This illustrates an important economic distinction. Business growth and business sustainability are related, but they are not identical. Higher revenue does not automatically translate into greater profitability while years of operation do not necessarily guarantee financial resilience.

The challenge, therefore, is not simply helping entrepreneurs access financing but also ensuring they can convert that financing into lasting improvements.

Micro and small businesses also have different needs. A home-based entrepreneur may require basic equipment and practical guidance while an established retailer may benefit more from inventory management, financial planning or access to new markets.

Assistance becomes more meaningful when it responds to these differences rather than assuming every business faces similar challenges.

Digitalisation offers another example. Technology can simplify transactions, improve inventory monitoring and support business decisions. However, introducing digital tools should not become an achievement in itself.

A retailer accepting digital payments may enjoy greater convenience, but without understanding daily expenses and profit margins, the business may remain financially vulnerable. Technology creates value when it improves business performance, not merely when it is adopted.

The same principle applies to entrepreneurship training. Someone who has operated a business for 10 years may not need another introductory course on starting a business. Instead, practical guidance on pricing, managing cash flow, controlling costs and preparing for unexpected disruptions could be more valuable.

This raises an important consideration for entrepreneurship policy. Financing approvals, equipment distribution and training participation indicate how widely programmes reach entrepreneurs. However, these measures alone cannot establish whether the businesses receiving assistance have become more sustainable.

A stronger assessment would examine what happens afterwards. Have profit margins improved? Are entrepreneurs managing their finances more effectively? Can their business withstand weaker demand or unexpected expenses? Are they becoming less dependent on repeated financial assistance?

These questions do not diminish the importance of government support. Rather, they help determine whether public resources are creating lasting economic value.

Importantly, sustainability should not be confused with rapid expansion. Not every hawker dreams of opening multiple outlets, and not every home-based entrepreneur wants to establish a large company. For many, success means earning a stable income, supporting their families and operating without constant financial uncertainty.

One practical approach is to complement financing with needs-based mentoring, simple financial management tools and periodic business assessments. Such support could help entrepreneurs identify operational weaknesses, strengthen decision-making and build resilience beyond the initial assistance period.

Budget 2027 offers an opportunity to strengthen Malaysia’s micro and small enterprises. But the real measure of entrepreneurship support is not simply how many businesses it helps remain open today but how many become strong enough to face tomorrow with greater confidence.

DR NIK ZIRWATUL FATIHAH

Research fellow post doctorate

Ungku Aziz Centre for Development Studies

Universiti Malaya