Prepare targeted support for MSMEs if crisis worsens, govt told

2026-03-18 - 08:31

The SME Association of Malaysia said Putrajaya cannot wait until defaults spread, layoffs rise and businesses close before acting more decisively. (File pic) PETALING JAYA: The Malaysian Employers Federation (MEF) has urged the government to prepare targeted support measures for businesses if conditions worsen due to the ongoing Middle East conflict, saying a broad-based stimulus is not yet necessary. MEF president Syed Hussain Syed Husman said Putrajaya must be ready to act swiftly should the situation deteriorate, especially to support micro-, small- and medium-sized enterprises (MSMEs). “Targeted measures such as temporary financial relief, facilitation of access to working capital, and cost-mitigation initiatives would be vital in supporting businesses, particularly MSMEs,” he said in a statement. Separately, SME Association of Malaysia president Chin Chee Seong called on the government and relevant agencies to implement a targeted six-month loan moratorium or repayment deferment for affected MSMEs. While the association appreciates the existing financing facilities and allocations under SME Bank and Bank Rakyat, Chin expressed hope that the government could expand the entrepreneur and cooperatives development ministry’s emergency financing to at least RM500 million. “The current allocation totals RM100 million, comprising RM50 million under SME Bank’s Success programme and RM50 million under Bank Rakyat’s BR Prosper-i scheme. “However, in the face of a possible national-scale shock, this quantum is too small. Therefore, the government should expand the allocation to at least RM500 million,” Chin said in a statement. Syed Hussain said it was important for Putrajaya to be proactive, not reactive or delayed, in its policy response to the impact of the crisis. “We cannot afford to take a ‘wait-and-see’ stance and only begin formulating financial assistance packages after the full impact has materialised. By then, the delay could prove detrimental, especially for businesses operating on thin margins.” He added that ready-made financing mechanisms and contingency frameworks should be developed in advance. Chin agreed, saying the government cannot wait until defaults spread, layoffs rise and businesses close before acting more decisively. This comes after the Federation of Malaysian Manufacturing (FMM) warned that Malaysia’s GDP growth could moderate to between 3.8% and 4.2%, compared with the earlier projection of 4.7%, if the conflict escalates. Yesterday, FMM president emeritus Soh Thian Lai called for a six-month bank loan moratorium for all MSMEs and broader fiscal support. Soh said this would give them greater breathing space to manage tight finances and prepare for operational challenges in the months ahead.