Funding Gap: SMEs in Malaysia

According to a Deloitte study analyzing SME access to financing, there is still a large segment of underserved and unbanked businesses in Southeast Asia. Malaysia, in particular, faces this very predicament: 38% of Malaysian SMEs are unserved or underserved by banks and financial institutions.


According to a Deloitte study analyzing SME access to financing, there is still a large segment of underserved and unbanked businesses in Southeast Asia. Malaysia, in particular, faces this very predicament: 38% of Malaysian SMEs are unserved or underserved by banks and financial institutions.

 

The situation is unfortunate as SMEs contribute tremendously to the society, in more ways than one. In any country, SMEs play a pivotal role in strengthening the national economy. Malaysian SMEs contribute to 33% of the national gross domestic product (GDP) and employ 58% of the population. Many of these SMEs have expanded overseas taking the homegrown products into many new markets.

 

Now, imagine how much bigger the Malaysian GDP would be if the local SMEs could grow faster and create more business opportunities! Amongst the many roadblocks they face, access to capital and financing is perhaps the most inhibiting. Even Malaysian SMEs with great potential find it difficult to develop without good-quality, affordable working capital and business financing options. Clearly, the funding gap for SMEs needs to be resolved.

 

While established financial institutions have financing products some SMEs can take advantage of, most SMEs lack the collateral needed to fit traditional business financing requirements. The long and grueling application process also turns away businesses. Not to mention, it can take more than a month for the funds to be disbursed – by when, the SME would have lost the opportunity. There is a structural issue here: SMEs don’t qualify, at most times, for the very stringent criteria put up by Financial Institutions to apply for business financing. The need of the hour is for financing that are fast, easy to take and meet the needs of the growing SMEs.

 

So, is there an answer for the lack of targeted SME financing in Malaysia? We have a solution and a surprise! Wait for our announcement tomorrow!




November 02, 2016    Funding Gap: SMEs in Malaysia
July 01, 2016    Insuring Your Future




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