More funds allocated to Malaysia’s MSME sector
Some 16,700 micro, small and medium enterprises (MSMEs) in Malaysia are to benefit from a RM134.6 million (£22.5m) allocation of funding from the SME Corporation Malaysia (SME Corp) in 2024 – a slight fall on the allocation in 2023.
According to Deputy Entrepreneur and Cooperatives Development Minister Ramanan Ramakrishnan, SME Corp disbursed RM131.3 million in funds for 22,861 MSMEs nationwide last year.
He said that while the figure this year is lower than last year’s, an additional allocation of funding to help entrepreneurs nationwide is being made via the Micro Madani Strengthening Programme.
“For this year, our aim is for 16,700 MSME but SME Corp will try to increase (the number) as best as possible in 2024,” Ramakrishnan said. “This includes financial assistance programmes for export purposes, such as the Bumiputera Export Incentive Programme and SMEs Go Global, as well as export capacity development programmes and business matching.”
He added: “Through the planned programmes and initiatives this year, the Ministry of Entrepreneur and Cooperatives Development, through its agencies, including SME Corp, remains committed to strengthening the country’s entrepreneurial ecosystem in line with the National Entrepreneurship Policy 2030 vision to make Malaysia a leading entrepreneurial nation and the Madani Economic Framework as a platform to elevate the country’s dignity by restructuring the economy towards making Malaysia a leading economy in the Southeast Asian region.”
The Micro Madani Program provides financial assistance to micro-enterprises in the form of grants, loans and other benefits.
SME Corp CEO Rizal Nainy said 83% – 84% of MSME fall under the services sector with the majority in the food and beverage industry. “We try to provide assistance to all MSME in all sectors, whether they be services, manufacturing, construction and farming,” he added.
Rizal said SME Corp’s programmes are focus on encouraging MSME involvement in high-impact industries, which will contribute to domestic trade and export value.
He said it has identified high-impact industries such as medical devices, smart farming, aerospace, electrical and electronics, biotechnology and others, “which will bring great impact to the industry and country”.
GDP set to grow in next 12 months
Meanwhile, leading economists believe Malaysia’s gross domestic product (GDP) is set to grow at a faster pace this year than in 2023.
CGS-CIMB Research is forecasting GDP growth at 4.6% in 2024, while Hong Leong Investment Bank (HLIB) Research said it expected GDP growth to steady at 4.8% in 2024.
Advance estimates from the government’s Statistics Department showed GDP likely grew 3.8% in 2023, which was below the government’s forecast of 4% for that year. If this is the case it would be a significant slowdown from the 8.7% GDP growth seen in 2022.
According to the government agency, advance estimates showed GDP growth at 3.4% in the fourth quarter of 2023, which was below the Bloomberg consensus forecast of 4.1% for that quarter. This compared with GDP growth of 3.3% in the preceding quarter.
Bank Negara is due to release the official fourth-quarter and full-year GDP numbers on 16 February.
CGS-CIMB Research said while international trade “would likely stay sluggish this year”, domestic consumption was expected to continue to anchor growth in 2024.
“While there is downside risk to consumption from the rollout of new taxes and subsidy adjustments, we think it will be gradual. In addition, the planned monthly cash handouts could offset new taxes adequately,” it added.
The research group added that a boost from tourism, especially with the visa-free programme for tourists from India and China, and the robust labour market with a falling unemployment rate and wage rises, should support growth this year.
Similarly, HLIB Research said it expected GDP growth in 2024 to be driven by an improvement in global trade activity, the ongoing recovery in the tourism sector and the steady labour market.
Nevertheless, it warned that Malaysia could face downside risks emanating from the escalation of geopolitical risks in the Middle East and Europe.
“These downside risks could lead to more volatile global financial environment and weaker economic growth,” it said.
