Alliance Bank Malaysia Berhad (Alliance Bank)’s MSME Business Outlook 2023 – Malaysia reported that 71.6% of Malaysian MSMEs saw that their revenues increase year-on-year in 2022, and almost half of the businesses (46%) said revenues have 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 GDP growth of 9.3% in the first three quarters of 2022.
Despite the projected weaker global economy and a possible impending recession in 2023, one in three (32.9%) 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% to the country’s total exports and provide employment to 47.8% of the population.
By supporting MSMEs grow, we are also helping them maximise their impact and contribution to the economy,” said Raymond Chui, Group Chief SME & Commercial Banking Officer of Alliance Bank.
Depreciation of the Malaysian ringgit (RM) was cited as the biggest concern among MSMEs this year, especially for import-driven businesses. Other key concerns include:
Higher cost of doing business (38%),
Lower sales (31%), and
Reduced domestic demand (26%).
Insufficient cash flow and working capital are also the common barriers to MSMEs’ growth
aspirations, where 42.9% 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.
These include offering specialised financial solutions, empowering them with financial education and resources, and deepening engagement with business owners to better understand their needs and challenges,” Chui continued.
The MSME Business Outlook 2023 – Malaysia report captures the responses from over 300
MSMEs surveyed by Alliance Bank Malaysia Berhad – Digital SME (Alliance DSME) in November and December 2022.
The report provides an overview of MSMEs’ key concerns, investment plans, digital initiatives, and Environment, Social and Governance (ESG) considerations for 2023.
This survey is one of the Bank’s many initiatives aimed to help bridge the gap between MSMEs and banks.
