KUALA LUMPUR: More than two thirds of small and medium enterprises (SME) in Malaysia expect their businesses to recover from the effects of the pandemic by April, while 80 percent indicated they have sufficient resources to see out the rest of the year.
Despite still facing a number of challenges economically, between one fifth to one third of the businesses surveyed, depending on their industry, indicated that their operations had returned to pre-pandemic levels, with the manufacturing sector seeing the strongest return to form.
Mastercard country manager, Malaysia and Brunei Perry Ong said while there's no doubt the Malaysian economy has been hit hard by the pandemic, the findings of this report gives cause to have optimism for recovery this year.
"The fact that so many SMEs have regained stability or are on the path to doing so is a testament to their strength and resolve in adopting new and more digital ways of doing business.
"Mastercard is working actively to support SMEs and businesses of all sizes as they adapt to a new normal, ensuring that they have the technologies and business insights they need to thrive in an economy that's becoming ever more digital by the day," he said in a statement today.
Mastercard Impact Study for SMEs was carried out by Data & Services, Mastercard's professional services arm that encompasses the company's offerings beyond the transaction.
The study, which was conducted at the end of 2020 and is part of a series focusing on the sentiment of businesses during Covid-19, found positive levels of optimism among Malaysia's SMEs.
As many businesses have been continuously taking proactive measures to protect against the shocks of the pandemic, 31 per cent of Malaysian SMEs are making investments now to ensure that they're prepared for an economic turnaround.
Furthermore, over the course of the pandemic, 21 per cent established an online presence for their business, and 39 per cent enhanced an existing online operation in order to better reach customers.
This is despite the fact that Malaysian small businesses are facing what is perhaps their greatest economic challenge since the Asian financial crisis of 1997, the survey showed.
When asked about what issues they've found most pressing during the pandemic, respondents indicated labour, finance, and sales were their biggest concerns, at 74 per cent, 64 per cent, and 63 per cent respectively.
In terms of support from financial institutions, 85 per cent of the respondents felt that assistance from banks has been either good or excellent.
When asked about what form of support would be most valuable to their operations, 66 per cent of SMEs wanted lower interest rates on loans, while 52 per cent wanted extended grace periods on debt repayment.
Interestingly, only half of the respondents were fully aware of the extent of the financial support offered by banks, which indicates an opportunity for financial institutions to conduct additional outreach with small businesses to help them better understand their options.
Looking at how businesses expect to grow their operations moving forward, 46 per cent indicated an intention to move towards using non-cash options for payments.
This is most likely a response to the way in which the pandemic drove a marked shift towards digitalization, as contactless payments became safer for both consumers and employees, and electronic payments saw increased usage for online purchases.
Mastercard Data & Services is actively supporting many businesses and government organisations, in Malaysia and around the world, with real-time data-driven insights to help them better understand and respond to the challenges created by Covid-19.