MoF to promote MSMEs sector for growth


FINANCE Minister Tengku Datuk Seri Zafrul Abdul Aziz (picture) aspires to actively promote the micro, small and medium enterprises (MSMEs) sector as it has contributed significantly to Malaysia’s economy and job opportunities.

He said that MSMEs contributed 37.4% of Malaysia’s gross domestic product (GDP) and employed 47.8% of the workforce in 2021.

“A concerted effort must be made to improve MSMEs’ knowledge, digital capabilities and collaborations with the innovator community such as multinational corporation (MNCs) and academia to help MSMEs’ build better offerings,” Tengku Zafrul said in his keynote address at Credit Guarantee Corp Malaysia Bhd (CGC)’s Financial Institutions/Development Financial Institutions and SME Awards 2021 on Friday.

Therefore, he challenged CGC, banks and financial institutions to strengthen the MSME sector in the country.

He noted that CGC has successfully assisted about one-third of registered MSMEs with insufficient or no collateral and track records to obtain financing.

“Moving forward, what is key is how CGC can further help the MSMEs recover so they can continue to contribute to the nation’s post-pandemic recovery and growth,” he said.

Apart from digitalisation, he said that it is also extremely important for MSMEs to embrace environmental, social and governance (ESG) principles.

“ESG assets are estimated to hit $53 trillion (approximately RM235 trillion) by 2025, a third of global Assets Under Management.

“Further, ESG funds now account for roughly 10% of worldwide fund assets,” he noted.

As such, he said that it is critical to ensure that MSMEs are not shut out of markets or deprived of future financing due to non-compliance with ESG principles in their operations.

According to the finance minister, Budget 2023 will also prioritise MSMEs’ competitiveness and resilience initiatives and other similar efforts to rebuild MSMEs’ capabilities and boost their competitiveness.

Meanwhile, he said that Budget 2023 will also leverage the strong recovery momentum seen in the first half of this year, strengthening Malaysia’s economic and fiscal resilience in 2023 and beyond, as well as planning and executing a strategic shift from the current recovery phase to longer-term reforms.