KUALA LUMPUR: Most micro SMEs (MSMEs) in the country have seen their revenues increase year-on-year in 2022, according to Alliance Bank Malaysia Bhd's MSME Business Outlook 2023.
The report said a total of 71.6 per cent of Malaysian MSMEs saw their revenues increase in 2022, and almost half of the businesses (46 per cent) said revenues had returned to pre-pandemic levels or exceeded expectations.
"This indicates an encouraging recovery momentum by the MSMEs in 2023, which is backed by
Malaysia's strong gross domestic product growth of 9.3 per cent in the first three quarters of 2022," Alliance Bank said today.
Despite the projected weaker global economy and a possible impending recession in 2023, one in three (32.9 per cent) MSMEs are optimistic in making business decisions and willing to take bolder strides for better future gains.
"MSMEs play a significant role in growing the Malaysian economy as the sector contributes 11.7 per cent to the country's total exports and provide employment to 47.8 per cent of the population.
"By supporting MSMEs grow, we are also helping them maximise their impact and contribution to the economy," said Alliance Bank group chief SME and commercial banking officer Raymond Chui.
The ringgit depreciation is cited as the biggest concern among MSMEs this year, especially for import-driven businesses.
Other key concerns include higher cost of doing business, lower sales and reduced domestic demand.
Insufficient cash flow and working capital are also the common barriers to MSMEs' growth aspirations, where 42.9 per cent of respondents expect cash flow to be an issue for them to capture business opportunities in 2023.
"It is important that MSMEs have convenient access to financing to grow their businesses. We understand that MSMEs face their own unique challenges such as limited access to financing and difficulty navigating complex financial regulations.
"As such, banks must consider new ways to facilitate the growth of MSMEs by providing them with solutions tailored to their business needs.
The report captured the responses from over 300 MSMEs surveyed by Alliance Bank in November and December 2022.