NRC member Kang Hua Keong said most SMEs are facing difficulties in meeting demand, liquidity issues and drop in revenue, and all these have severely affected their ability to function.
“I had highlighted two main issues that SMEs face — labour shortage and financial problems. I have always communicated with the government on how we could help companies that were unable to pay salaries or their workers had to be laid off,” he said.
Kang expressed hope that the government could introduce a policy to help SMEs survive bankruptcy and operational disruptions.
At a media briefing last Friday, he said most SMEs faced legal action as soon as the government announced the resumption of all economic activities.
He said many companies are still having cash flow problems while others have received bankruptcy notices as they do not have plans to back them up.
A total of 39% of businesses in Malaysia have enough cash to last them less than a month, while 23% have overdue payments, according to the results of a business pulse survey conducted in February and March by the entrepreneur development and cooperatives ministry.
It said 75% have encountered delayed payments from customers while 11% have filed for insolvency.
Kang proposed that special action committees on cash flow constraints and financing be set up by the ministry to look into the problems faced by SMEs.
“We also recommended that banks be given permission to proceed with rescheduling programmes or financing restructuring (moratorium) for SMEs,” he said.
Foreign labour shortage
On the supply side, Kang said, SMEs experienced significant reduction in foreign workforce as most of the workers had returned to their home countries during the lockdowns.
He said various sectors, especially plantations, lost almost RM20 billion last year due to labour shortages.
“The NRC was informed that until September, 1,152,276 migrant workers had already applied for permits to work here, but only 467,223 (40.5%) of those applications have been approved,” he said.
Kang said that until Sept 12, only 76,000 migrant workers had been brought into Malaysia.
He said the labour crunch had caused interruptions in the supply chain, leading to shortages of parts and intermediate goods and services.
“The government should provide a blanket approval for migrant labour. For instance, at least half of all applications should be approved without delay,” he said.
He said a one-stop centre to reduce bureaucracy and expedite approvals should be set up so that SMEs could operate and slowly recover from the aftermath of the pandemic.
Kang added that political instability has affected the process of recovery in Malaysia, with many policies still not implemented due to the many changes in government.
“We are not really relying on financial assistance but we (SMEs) are looking more for policies or measures that can help address labour shortage and other financial issues. If these are addressed, only then can the SMEs move forward,” he added.