Accountants, accounting, international, digital, news, future, business, global

Malaysia: Half of MSMEs at risk of failing

Malaysia: Half of MSMEs at risk of failing

Some 49% of Malaysia’s micro, small and medium-sized enterprises (MSME) are in danger of failing if the nationwide lockdown continues, according to new research.

A survey by the Entrepreneur Development and Cooperatives Ministry (Medac) found that 580,000 businesses are at risk of collapse by October if they are not allowed to start operations before then. Collectively, they account for almost 40% of the country’s gross domestic product.

Medec said the closures could lead to seven million Malaysians losing their jobs. “Assuming that each worker has an average of two dependents, it will mean that another 14 million people will be affected by this situation,” Medac said.

Medac minister Datuk Seri Wan Junaidi Tuanku Jaafar said: “This is the hard truth that needs to be voiced in order for people to realise the dire situation faced by the local MSMEs and the urgent need to come up with the right remedial actions to address this issue.

“If we don’t do something to help them now, I am worried that many of these MSME will fail and will not be around to help rebuild the economy once businesses are allowed to open.”

He added: “The impact of the lockdown is not only affecting the economic aspect but also the social aspect as well.”

Medac conducted the survey of 6, 664 businesses from June 15 to June 28, in order to gauge the impact of the latest movement control order. It also found that about one-third of respondents said they had not received any financial assistance from the government.