FINANCIAL ECOSYSTEM MUST ALLOCATE MORE RESOURCES TO ASSIST MSMES -- HUI YING

KUALA LUMPUR, July 18 (Bernama) -- Credit Guarantee Corporation Malaysia Bhd (CGC), financial institutions (FIs) and development financial institutions (DFIs) are encouraged to allocate more resources to critical sectors like chemicals/petrochemicals, the digital economy, electronics and electrical, and pharmaceuticals. 

The effectiveness of government programmes for the development of micro, small and medium enterprises (MSMEs) relies on collaboration among these institutions, said Deputy Finance Minister Lim Hui Ying.

“To propel our nation towards advanced economic growth, the financial ecosystem must collectively address the challenges faced by MSMEs,” she said when officiating the CGC 29th FI/DFI & SME Awards 2023 here today.

Two non-negotiable focus points emerge in this era of digitalisation, namely artificial intelligence (AI) and environmental, social, and governance (ESG), Lim said, adding that MSMEs must embrace AI as a transformative tool.

“As digitalisation continues to advance, we must foster innovation and nurture local solutions and startups. 

“Malaysia’s transition into the digital world could potentially position us as a leading player on the global stage,” she said.

Lim commended CGC for its unwavering commitment to meeting the financing needs of MSMEs.

“The corporation has transitioned from a traditional credit guarantee provider to a financially sustainable institution, offering guarantees, financing, and non-financial advisory services to MSMEs,” she said.

Lim said MSMEs serve as the backbone of economies worldwide, employing over two-thirds of the global workforce and significantly contributing to  gross development product (GDP) growth.

In Malaysia, MSMEs account for about 38.4 per cent of the GDP and 48.2 per cent of total employment in 2022, she noted.

Lim said MSMEs constitute a staggering 97.4 per cent of all business enterprises in the country, underscoring the critical importance of MSME development. 

“However, our MSMEs continue to rely on traditional sources of funding from the banking sector, yet there remains an estimated RM290 billion financing gap for MSMEs alone, indicating the limited access to funding for smaller-scale businesses,” she said.

Since its inception in July 5, 1972, CGC has provided over RM95.4 billion in financing to over 380,000 MSMEs.

This demonstrates the corporation’s unwavering commitment through its sustainable initiatives in providing customised financial solutions and strategic guidance, ensuring the success of Malaysian MSMEs, she said.

Also present at the awards ceremony were CGC chairman Datuk Mohammed Hussein and president and chief executive officer Datuk Mohd Zamree Mohd Ishak.

-- BERNAMA