MCA calls for loan moratorium as diesel costs squeeze food SMEs

 

THE Malaysian Chinese Association is calling for temporary relief measures to cushion small and medium-sized enterprises (SMEs) in the food manufacturing sector following the recent spike in diesel prices.

Its Economic and SMEs Affairs Committee chairman, Lawrence Low, said many producers are under mounting financial pressure, with some reporting an additional RM100,000 in monthly operating costs. 

For businesses already running on thin margins, he warned, the situation could push them towards closure.

Low urged Bank Negara Malaysia and other relevant agencies to consider short-term loan repayment assistance, alongside easier access to low-interest working capital. 

His statement was echoed by the Federation of Malaysian Manufacturers (FMM) who proposed broader support for its members, including a six-month loan moratorium for micro, small and medium enterprises (MSMEs). 

FMM president emeritus Soh Thian Lai noted that MSMEs make up about 97% of all businesses in Malaysia, many of which have yet to fully recover from the financial strain of the Covid-19 pandemic.

According to Low, the loan moratorium would help ease immediate cash flow constraints and give affected companies time to stabilise.

He also cautioned that the impact of rising diesel costs extends beyond individual businesses. If left unchecked, it could disrupt food supply chains, affect employment, and ultimately drive up prices for consumers.

However, note that over the years, the central bank has channelled significant funding to support MSMEs through the banking system. 

In January alone, Bank Negara announced an additional RM2.5 bil allocation, bringing the total pool of funds available for MSME financing to RM34.9 bil. — Focus Malaysia