Kuala lumpur: Overall financing conditions for small and medium enterprises (SMEs) remain supportive, with banks and development financial institutions (DFIs) continuing to provide financing to viable businesses. Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour emphasized the role of the Credit Guarantee Corporation Malaysia Bhd (CGC) at the recent CGC Awards 2025 ceremony, highlighting its contribution of more than RM103 billion in guarantees and financing to over 544,000 SMEs since its inception.
According to BERNAMA News Agency, Abdul Rasheed stressed the importance of SMEs adapting, strengthening capabilities, and improving productivity in response to ongoing economic challenges. He noted that while temporary relief measures are crucial during periods of disruption, they cannot serve as a long-term solution to recurring economic shocks. Current challenges for SMEs include higher input costs, tighter margins, supply-chain disruptions, and slower customer payments, all of which strain working capital and test business resilience.
Abdul Rasheed explained that businesses today face an environment shaped by geopolitical uncertainties, rapid technological advancements, and frequent climate-related disruptions. These factors impact SMEs directly by affecting input costs, altering supply chains, and changing customer behavior and demand, thus necessitating higher capabilities to remain competitive.
He underscored the growing importance of SMEs in driving Malaysia's economic transformation towards greater productivity, competitiveness, and sustainability. The critical question, he posited, is not merely the availability of financing but whether financial products are evolving to accommodate changing business models and risk profiles.
Abdul Rasheed highlighted the need for financial institutions to broaden their approach, reaching beyond conventional businesses and sectors as Malaysia progresses up the value chain. He advocated for a more comprehensive assessment of businesses, considering cash flows, transaction records, payment behavior, and supply-chain information alongside traditional financial metrics.
He concluded by stressing that access to financing must be accompanied by capability-building, as long-term success for SMEs hinges on productivity, management strength, technology adoption, and market expansion.