Don’t set too many requirements for SME funding, says group

Many micro-SMEs don’t even have an account to record sales, says the SME Association of Malaysia.

PETALING JAYA: A small and medium-sized enterprises (SME) group today urged banks not to set too many restraints for small businesses applying for assistance during the Covid-19 crisis.

SME Association of Malaysia president Michael Kang said over 70% of SMEs were reluctant to apply for the special aid as participating banks demand many requirements including three years’ record of sales and adherence to the limit on shareholders.

“Banks should not set too many conditions… because the majority of micro-SMEs don’t even have an account to record their sales,” he said in a webinar.

He said SMEs also face problems obtaining loans as banks take profit margins into consideration.

“If you don’t have a good record, banks won’t approach you.”

Even those who had applied and obtained approval had yet to receive the funds from the banks, he said.

“Over 1,300 SMEs got approval for the funds but they are still not released due to the movement control order (MCO).

“We hope banks can speed up the process,” he said.

Bangi MP Ong Kian Ming, who spoke at the same webinar, said gradually lifting the MCO would be key to the exit strategy for SMEs.

“In zones with fewer cases, perhaps there can be fewer restrictions,” he said.

“Restaurants and businesses, for example, can operate in green zones.”

He added that new standard operating procedures must be put in place to give guidance to businesses in restarting their activities.

Kang also urged the government to allow SMEs offering non-essential services to resume partial operations, saying this could help them generate cash flow.

He said a proposal to this effect had been submitted to the international trade and industry ministry.

He added that a number of SMEs involved in the global supply chain had been penalised as they were unable to process and deliver orders to other countries due to the MCO.

If the situation prolongs, he said, these SMEs could lose their supply contracts.

Malaysia Digital Economy Corporation chief operating officer Ng Wan Peng meanwhile spoke of the importance of a digital presence for the survival of SMEs.

She said there had been a surge in search for e-commerce since the MCO was implemented three weeks ago.

“E-commerce will help more people reach out to their customers,” she said. - FMT