SMEs in Malaysia expect long road to economic recovery
As business activities continue to be adversely impacted by the COVID-19 pandemic, only 17% of SMEs in Malaysia are confident that their business would recover within the next three months.
According to a new survey of 982 respondents conducted recently by the SME Corporation Malaysia, the majority of the 17% of SMEs who expect to see recovery are from the food and beverage sector, with SMEs in the tourism and related sectors the least optimistic, as they foresee a recovery period beyond 12 months.
Within the textile, wholesale and retail sectors, 69% of respondents indicated the belief that their business could recover within the next three to 12 months.
Collectively however, the respondents believe that business recovery can only succeed if they continue to receive aid in the form of schemes such as Malaysia’s National Economic Recovery Plan (PENJANA).
Introduced in June, the 35 billion ringgit (US$8.1 billion) stimulus package is primarily aimed at helping businesses recover from the impact of COVID-19. For instance, SMEs incorporated between July 1, 2020 and December 31, 2020, will receive an income tax rebate of up to 20,000 ringgit (US$4,670) for the first three years.
According to the Companies Commission of Malaysia (SSM), 4,542 companies ceased operations during the April 1 – July 19, 2020 period, while 82,555 new businesses were registered in the same period.
Moving forward, the challenge for SMEs in Malaysia is how they quickly and agilely they adopt differentiated strategies to survive in the ‘new normal’, said Datuk Seri Dr Wan Junaidi Tuanku Jaafar, Malaysia’s Entrepreneur Development and Cooperatives Minister.
He also urged SMEs to embrace digitalisation for their business operations, develop a business continuity plan, and work closely with financial institutions to manage their cash positions.