KUALA LUMPUR, April 3 2020: Despite their complaints arising from the Covid-19 pandemic, small and medium-sized enterprises (SMEs) actually have adequate access to credit facilities.
Bank Negara Malaysia (BNM) in its Financial Stability Review 2019 report released today said SMEs were being offered more favourable terms on collateral requirements and financing rates from local banks.
“In the second half of 2019, banks received 131,152 applications from SMEs and about three out of every four loan applications processed have been approved. This was in line with past trends,” BNM said in the report.
BNM admitted that the tough operating environment would worsen due to Covid-19 but pointed out that measures have been implemented to mitigate this, such as the deferment of business loans for six months and the option to restructure corporate loans.
“Depending on the duration and severity of the pandemic, the pre-emptive measures taken should enable firms to recover more quickly once business conditions normalise,” BNM said.
The government has included a RM100 billion allocation for SME credit in its Prihatin stimulus package.
SMEs include any non-manufacturing business with fewer than 75 employees or an annual turnover of below RM20 million as well as those in manufacturing with less than 200 workers or RM50 million.
SME Association of Malaysia has claimed that a third of its members would have run out of money last month while another third will exhaust their funds this month.