Chapter 21

Malaysian Government Business Support

and Assistance for Small and Medium
Enterprises: A Case of COVID-19
Pandemic Crisis
Azrain Nasyrah Mustapa and Armanurah Mohamad

Abstract
In Malaysia, small- and medium-sized enterprises (SMEs) are the significant
contributor to economic growth. However, since the coronavirus outbreak,
Malaysian SME business activity has been severely slowed. Therefore,
during this COVID-19 pandemic crisis, government business supports and
assistances are indispensable because if SMEs go down, the country will be
affected. This chapter will focus on supports and assistances provided by
Malaysian government on SMEs impacted from the COVID-19 pandemic
crisis. The chapter will be introduced with the background of SMEs in
Malaysia, follow by scenarios of COVID-19, the Movement Control Order
imposed by Malaysian government, and the impact of COVID-19 on SMEs.
Next the chapter will discuss the government supports and assistances and
follow by government monitoring on supports and assistances given. Lastly,
the chapter ends with suggestions for SME recovery of COVID-19
pandemic crisis.

Keywords: Government supports; small medium enterprises; COVID-19;

PRIHATIN; PRIHATIN PLUS; Movement Control Order (MCO)

1. Introduction
Over the years, past studies on small and medium-sized enterprises (SMEs) in
Malaysia have shown that SMEs faced many issues and challenges. Currently, in
year 2020 another great globally big challenge to the SMEs is regarding the
coronavirus (COVID-19) pandemic crisis that has caused great distress not just in

Modeling Economic Growth in Contemporary Malaysia, 291–305

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292 Azrain Nasyrah Mustapa and Armanurah Mohamad

Malaysia, but also to the worldwide. Therefore, effective business support pro-
grams provided by government to better equip the Malaysian SMEs with
incentives and stimulus packages are able to help in lowering the failure rate
among SME. Hence, it will be able to ensure their sustainability to meet business
challenges in the competitive global business environment. This chapter will focus
on action taken by Malaysian government in supporting and assisting SMEs to
sustain their venture as a result of pandemic crisis of COVID-19. The chapter will
begin with the background of SMEs in Malaysia, followed by scenarios of
COVID-19, the Movement Control Order imposed by Malaysian government,
and the impact of COVID-19 on SMEs. Next the chapter will discuss the gov-
ernment supports and assistances which is the main focus of this chapter and
follow by monitoring of government supports and assistants. The chapter ends
with suggestions for SME recovery of COVID-19 pandemic crisis.

2. Background of Small and Medium Enterprises in Malaysia

The development of SMEs in Malaysia started when the government introduced
the New Economic Policy (NEP) in 1971, which aimed to improve people’s
welfare and restructure ethnic economic imbalances (Saleh & Ndubisi, 2006). In
the past, SME policies were based on the Third Industrial Master Plan and the
Ninth Malaysia Plan. The introduction of the new Economic Model (NEM) and
Tenth Malaysia Plan (10MP) will require some realignment and adjustment of
SME development policies and initiatives in order to achieve sustainable eco-
nomic growth and a developed nation status by a 2020 (Shamsuddin, Jaaffar,
Sarkawi & Abdul Rahim, 2017).
SMEs have been recognized as a strategic thrust in the Malaysian economy
based on various reports of government agencies. Various definitions of SMEs
can be found in the literature review but given that there have been many
developments in the economy since 2005 such as price inflation, structural
changes, and change in business trends; a review of the definition was undertaken
in 2013 and a new SME definition was endorsed at the 14th NSDC Meeting in
July 2013. The definition covers all sectors, namely services, manufacturing,
agriculture, construction and mining and quarrying.
Sales turnover and number of full-time employees are the two criteria used in
determining the definition with the “OR” basis as follows:

• For the manufacturing sector, SMEs are defined as firms with sales turnover
not exceeding RM50 million OR number of full-time employees not exceeding
200.
• For the services and other sectors, SMEs are defined as firms with sales
turnover not exceeding RM20 million OR number of full-time employees
not exceeding 75 (SME Corps. Malaysia, 2020).

The definition classification of SMEs in Malaysia is shown in Fig. 21.1

 Malaysian Government Business Support for SMEs 293

Fig. 21.1. Definition Classification of SMEs in Malaysia. Source:

Author adapted from Small and Medium Enterprise Corporation
(SME Corp), 2020

3. Scenarios of COVID-19
Coronavirus disease (COVID-19) is an infectious disease caused by a newly
discovered coronavirus. Most people infected with the COVID-19 virus will
experience mild to moderate respiratory illness and recover without requiring
special treatment. Older people, and those with underlying medical problems like
cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more
likely to develop serious illness.
Currently, there are no specific vaccines or treatments for COVID-19 as the
medical teams are still searching and research it. However, there are many
ongoing clinical trials evaluating potential treatments (https://www.who.int/
health-topics/coronavirus#tab5tab_1). To date of May 28, 2020, COVID-19 is
affecting 216 countries, areas, and territories with cases around the world. There
have been 5,596,550 confirmed COVID-19 cases globally. From that number,
353,373 confirmed deaths have been recorded (https://www.who.int/emergencies/
diseases/novel-coronavirus-2019).
The COVID-19 pandemic in Malaysia is part of the ongoing worldwide
pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute
294 Azrain Nasyrah Mustapa and Armanurah Mohamad

respiratory syndrome coronavirus 2 (SARS-CoV-2) (https://en.wikipedia.org/

wiki/COVID-19_pandemic_in_Malaysia). The virus was confirmed to have
reached Malaysia in January 2020, when it was detected on tourists from China
arriving via Singapore on 25 January, subsequent the outbreak of COVID-19 in
Hubei, China (Joseph & Sam, 2020; GardaWorld, 2020). In a few weeks,
Malaysia has recorded the largest cumulative number of confirmed COVID-19
infections in Southeast Asia (The Straits Times, March 21, 2020), which breaking
over 2000 mark in active cases by the end of March from fewer than 20 at the start
of the month.
As to date of May 28, 2020, the Director General reported 10 new cases (all
local transmission; five locals and five foreigners) bringing a total of 7629
confirmed cases, 86 patients have been discharged with the total number of 6169
recoveries and 1345 active cases with 8 in intensive care and 4 on ventilator
support. The total death remains at 115 (Joseph, 2020; Ministry of Health-
Malaysia), fast-tracked testing also reveals a comparatively low case fatality rate
of 1.51% as of May 28, 2020.
Related to these scenarios of COVID-19, Malaysian SME business activity has
been severely slowed. Coronavirus (COVID-19) is significantly impacting SMEs
businesses and Malaysian economy.

4. Movement Control Order and Conditional Movement Control

Order in Malaysia
On March 16, 2020, Malaysia Prime Minister has made a special message on
COVID-19 as the current situation regarding the COVID-19 pandemic has spread
over 135 countries (as to date March 16, 2020). At that moment, there have been
162,711 confirmed COVID-19 cases globally and 6443 confirmed deaths have
been recorded (The Prime Minister’s special Message on COVID-19-16 March,
2020). In Malaysia, there was a jump in rise of number of cases: 190 cases
recorded on March 15, 2020, and additional 125 cases on March 16, 2020.
Therefore, the total number of cases was at 553 cases whereby 511 are being
treated, 42 have fully recovered.
Malaysian government has decided to implement a nationwide Restriction of
Movement Order beginning March 18 until March 31. This Order is enforced
under the Control and Prevention of Infectious Diseases Act 1988 and the Police
Act 1967, and encompasses the following:

• Complete restriction of movement and assembly nationwide, including reli-

gious activities, sports, social, and cultural events. To enforce this restriction,
all houses of worship and business premises are to be closed, except super-
markets, public markets, sundry shops, and convenience stores selling
essential goods. Specifically, for Muslims, the suspension of all religious
activities in mosques and Suraus, including the Friday prayers, is in line with
decision of the Special Muzakarrah Committee that convened on the March
15, 2020.
 Malaysian Government Business Support for SMEs 295

• A complete travel restriction for all Malaysians going overseas. For Malaysians
returning home, they are required to undergo health checks and voluntary self-
quarantine for a period of 14 days.
• A complete restriction of foreign visitors and tourists into Malaysia.
• Closure of all kindergartens, public and private schools, including day schools
and residential schools, international schools, Tahfiz centers, and all other
institutions of learning in primary, secondary, and preuniversity levels.
• Closure of all public and private institutions of higher learning nationwide,
including skills training institutes.
• Closure of all government and private premises except those involved in essential
services (water, electricity, energy, telecommunications, post, transportation, irri-
gation, oil, gas fuel, lubricants, broadcasting, finance, banking, health, pharmacy,
fire prevention, prisons, ports, airports, security, defense, cleaning, food supply &
retail) (Prime Minister’s Special Message on COVID-19 – March 16, 2020)

As cases rise, jumps began to occur in early March, Prime Minister of

Malaysia has announced another four times extensions as additional two-week
phases over the course of two months of a nationwide “Movement Control
Order” (MCO) and “Conditional Movement Control Order” (CMCO) (John,
2020; Tashny, 2020).

• Phase 2 has been declared on March 25 (Bernama, March 25, 2020; Kenneth,
2020) and extends the MCO to April 14 as new cases continued to rise.
• Phase 3 were announced on April 10, extends the MCO to April 28 (Bernama,
April 10, 2020; Nadirah, April 10, 2020) as the number of cases was projected by
the WHO to peak in mid-April (Yudith, 2020; The Straits Times, April 3, 2020).
• Phase 3 was declared on April 23, extends the MCO to May 12 (New Straits
Times, 2020).
• On May 10, the CMCO was extended until June 9, the fourth extension since
March 18. This extension lasts about a month (Xi Yi, 2020; Zakiah, 2020).

Due to this order, the very backbone of the Malaysia economy, the SMEs are
in a world of pain right now, with many forced to close their doors and others
struggling to keep afloat in the face of the COVID-19 outbreak and the
imposition.
According to the Statistic Department, 98.5% of business establishments in
Malaysia are SMEs (The Star, March 31, 2020). The SME sector contributes to
more than two-thirds of total employment in Malaysia and almost 40% to the
economy. Therefore, it is important for the sector to remain resilient in the face of
economic pressures that are affecting globally.

5. The Impact of COVID-19 on SMEs

The impact of the coronavirus (COVID-19) is being felt by all businesses around
the world, especially SMEs. In most of the country, SMEs have gained a
296 Azrain Nasyrah Mustapa and Armanurah Mohamad

prominent role as the significant contributor to the economic growth. However,

since the coronavirus outbreak, the world nowadays is heading toward economic
downturn.
The findings by the Enterprise Survey for Innovation and Entrepreneurship in
China (ESIEC) on February 10, 2020, on the “condition of micro, small, and
medium-sized enterprises (SMEs) include: 80% of firms had not resumed opera-
tions; 40% could not determine a timeframe for resumption; 20% firms will be
unable to last beyond a month on a cash flow basis, and 64% beyond three
months, presenting a dire picture for SME bankruptcies under an extended
epidemic scenario; barriers to business operations vary along the supply chain,
with upstream firms mainly affected by labor shortages, while downstream firms
face more serious challenges related to supply chains and consumer demand.
In Malaysia, the COVID-19 crisis was an unexpected and SMEs were not
prepared for this situation. It is an unexpected event, not only in Malaysia but the
world in general is affected by the outbreak. The COVID-19 crisis has had a
direct impact on SMEs especially in terms of cash flow, and preliminary studies
have shown that SMEs can last for less than three months to help them stay
competitive. In order to deal with the negative impact of the Coronavirus, busi-
nesses will cut down on discretionary expenses, reduce employee costs, and other
relevant actions are taken.
Related to the negative impact of COVID-19, recently, the New Straits Times,
on May 21, 2020, reported that government helps and supports are important as
the MCO affected half of March, the number of unemployed persons increased by
16.2% as recorded by Department of Statistic Malaysia. Moreover, Malaysia’s
economic outlook is forecast with 93% of SMEs expected to face unstable busi-
ness within six months. Since SMEs are the Malaysian economic hearts, the
government needs to lend help to SMEs by giving business supports and assis-
tance for at least six months after the crisis in an effort to restore SMEs and the
country’s economy.

6. Government Business Supports and Assistances

Malaysian government has announced business supports and assistances in the
form of stimulus package to cushion the economic fallout from the COVID-19
outbreak to help businesses, especially SMEs. Government business supports and
assistances to SME of COVID-19 can be categorized into two categories/phases,
namely, Economic Stimulus Package Prihatin Rakyat (PRIHATIN) and
PRIHATIN PLUS. Besides, additional measures to support SMEs affected by the
COVID-19 outbreak has been launched by Bank Negara Malaysia (BNM).

6.1 PRIHATIN
On March 27, 2020, Malaysian Prime Minister have announced an economic
stimulus package called Prihatin Rakyat (PRIHATIN) worth RM250 billion. To
assist SMEs, including micro-entrepreneurs, the government and Bank Negara
 Malaysian Government Business Support for SMEs 297

Malaysia (BNM) will provide additional funds worth RM4.5 billion which covers
five key initiatives:

• First: Increasing funds to the Special Relief Facility (SRF) for SMEs by RM3
billion bringing the total to RM5 billion. In addition, the interest rate for the
entire fund will be reduced from 3.75% to 3.5%.
• Second: Increasing the size of the All Economic Sector Facility fund by RM1
billion to RM6.8 billion to enhance access to financing for SMEs.
• Third: Providing additional funds of RM500 million under the Micro Credit
Scheme, to a total of RM700 million for soft loans. The scheme will be
administered by Bank Simpanan Nasional at 2% interest rate with no collat-
eral. Loan eligibility requirements are also relaxed to a minimum of 6 months
of operation compared to 1 year of operation. Maximum financing amount is
also increased from RM50,000 to RM75,000 for each entrepreneur. The
initiative is open to all micro-entrepreneurs in all business sectors including
childcare centers, taxi and bus operators as well as the creative industry and
online traders.
• Fourth: SMEs with business records of less than 4 years can also leverage the
BizMula-i and BizWanita-i schemes for financing up to RM300,000 under the
Credit Guarantee Malaysia Berhad (CGC).
• Fifth: Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will provide RM5
billion worth of guarantees and increase the guarantee coverage from 70% to
80% for SMEs that face difficulties in obtaining loans.

Through these initiatives, government believes financial institutions will be

able to provide the needed support to viable SMEs especially in weathering the
current economic challenges. Government is also concerned of the owners of
companies facing cash flow constraints. To assist those affected, the government
will implement following measures:

• First: The EPF introduces the Employer Advisory Services (EAS) program on
April 15, 2020. This service includes options for deferral of payments,
restructuring and rescheduling of employer contributions. The measure is
expected to provide cash flow to employers which is estimated at RM10 billion,
benefitting over 480,000 SMEs and affected companies while securing more
than 8 million jobs.
• Second: Exempt payment for Human Resources Development Fund (HRDF)
levy for all sectors for a period of six months beginning April 2020. This
measure is expected to assist the company’s cash flow with a total savings of
RM440 million.
• Third: Empathizing problems faced by some 750,000 SMEs, the government
also allows the postponement of income tax installment payments to all SMEs
for a period of 3 months beginning April 1, 2020. This is in addition to the
previously announced measures where the government has postponed tax
installment payments to affected businesses in the tourism sector for 6 months
beginning April 1, 2020. For other affected sectors, they are also allowed to
298 Azrain Nasyrah Mustapa and Armanurah Mohamad

revise the amount of income tax imposed in the third, sixth, and ninth
installments during the basic accounting period.

To assist SMEs and individuals, the government welcomes the willingness of

banking institutions to offer a 6-month moratorium, conversion of credit card
balance to term loans, and restructuring of corporate loans. This measure is
important to enable the companies to continue to be able to retain employment
and immediately resume its business activities. This initiative is worth at least
RM100 billion. The moratorium will also be extended to loans to other gov-
ernment agencies providing financing to SMEs as well as cooperatives beginning
April 1, 2020.
To assist B40 entrepreneurs and people, the median for household income of
at least RM3000, who lose their jobs, a social financing program will be
introduced in collaboration with Islamic banking institutions, the state Islamic
religious council, and key implementing partners. Social donations will be
channeled in the form of initial capital for micro-entrepreneurs using zakat
funds (which is charity Muslim fund) and matched with microfinancing at
affordable rates.
The first phase of the collaboration between Bank Islam Malaysia Berhad and
the Federal Territory Islamic Religious Council will commence in May 2020.
Eligible entrepreneurs will be given training in entrepreneurship and financial
management as well as support to develop their businesses (Prihatin Rakyat
Economic Stimulus Package (PRIHATIN) Speech Text, 2020).

6.2 PRIHATIN PLUS

On April 6, 2020, the Malaysian government issued an additional allocation of
RM 10 billion in the Prihatin Package for SMEs (Additional Measures) to help
ease the financial burden of the SMEs. The funding was approved after the
government extended the nationwide lockdown by another two weeks to April 28,
2020. This additional package named as PRIHATIN PLUS valued at RM10
billion hopes to ease the financial burden of SMEs, especially their cash flow
problems following the MCO and subsequently assures two-thirds of the work-
force will remain employed (Additional PRIHATIN SME Economic Stimulus
Package (PRIHATIN SME1, April 6, 2020)).
The additional measures are:
First, the wage subsidy program announced on March 27 will be expanded
from RM5.9 billion to RM13.8 billion, an increase of RM7.9 billion. Under this
additional initiative, all companies with local employees earning a monthly salary
each of RM4,000 and below will receive wage subsidies as follows:

• For companies with a workforce of more than 200 people, we will provide a
wage subsidy of RM600 per month for every retained worker. However, the
maximum number of workers that a company is eligible to claim for will be
increased from 100 to 200 employees.
 Malaysian Government Business Support for SMEs 299

• For companies with employees between 75 to 200 people, they will receive a
wage subsidy of RM800 per month for every employee.
• Finally, for companies with employees of less than 75 people, we will provide a
wage subsidy of RM1,200 per month per employee. Through this improve-
ment, companies will receive more benefits and assistance.
• This assistance is for a 3-month period and is specifically for employers
registered with the Companies Commission of Malaysia (SSM) or local
authorities before January 1, 2020, and are registered with the Social Security
Organization (SOCSO). It is estimated that 4.8 million employees will benefit
from this initiative.
• For employers opting to accept this assistance, they are required to retain their
employees at least for a period of 6 months, that is, 3 months during the period
receiving the subsidies and 3 months thereafter.

Secondly, a Special PRIHATIN Grant amounting to RM2.1 billion will be

established for eligible micro enterprises. A grant of RM3,000 will be provided to
each company, benefitting almost 700,000 micro enterprises. The micro SMEs
will have to register with LHDN to enjoy this assistance. The local authorities and
SSM will provide the list of eligible micro enterprises to government.
In addition, the government would like to urge the registered money lenders,
who offer credit facilities under the Money Lenders Act 1951, to provide mora-
toriums to SMEs for loan repayments for 6 months beginning April 2020, similar
to those provided by banks. I hope that these money lending organizations are
equally sympathetic to the hardship faced by their clients and together helping to
ease their financial burden.
Furthermore, to ease the financial burden of SMEs, the government has also
undertaken a number of initiatives to facilitate SMEs in deriving the full benefits
from all the assistances that have been announced. Among the improvements that
will be introduced are as follows:

• First: Abolish the 2% interest rate to 0% under the Micro Credit Scheme
amounting to RM500 million under Bank Simpanan Nasional (BSN). The soft
loan scheme for micro enterprises is also extended to TEKUN Nasional with a
maximum loan limit of RM10,000 at 0% for each enterprise. A total of RM200
million fund will be allocated for this purpose. Applicants are given an option
to choose either scheme to ensure more beneficiaries of this facility.
• Second: Waive or provide discounts for rentals to SMEs in the retail sector
which are operating on premises owned by Government-Linked Companies
(GLCs). The GLCs such as MARA, PETRONAS, PNB, PLUS, and UDA as
well as several state governments have agreed to give either discounts or rental
waivers on their premises to SME tenants.

On the principle of burden sharing, the government also urges owners of

private premises to provide similar assistance to their tenants to reduce their
rental rates. Owners of buildings or business spaces that provide rental reduction
or waiver to tenants that consist of SMEs are given a further tax deduction which
300 Azrain Nasyrah Mustapa and Armanurah Mohamad

is equivalent to the amount of rental reduction for the months of April until June
2020. This further tax deduction is subject to the condition that the rental
reduction is at least 30% of the original rental rate for that particular period.

• Third: To reduce the levy on foreign workers by 25% to all companies with
work permits that will expire in the period of April 1 to December 31, 2020.
This reduction is not applicable to the domestic help sector (Additional
PRIHATIN SME Economic Stimulus Package [PRIHATIN SME1], 2020).

Due to the difficulties faced by employers in retaining their employees in these

trying times, the government encourages employers to actively engage with their
employees on employment terms including the options of pay cuts and unpaid
leave during the MCO period. Employers and employees may refer to the
Department of Labor to seek advice on solutions for issues raised. Any negoti-
ations should be subjected to employment laws currently being enforced. What is
important is that the rights and welfare of both sides are taken care of.

6.2.1 Additional Measures by Bank Negara Malaysia

Additional measures to support SMEs affected by the COVID-19 outbreak has
been launched by Bank Negara Malaysia (BNM). BNM has enhanced the
existing financing facilities under BNM’s Fund for SMEs to provide greater
assistance to SMEs in sustaining business operations and preserving jobs, as well
as to support growth of business in current economic conditions. Interested
SMEs can access the following five financing facilities under BNM’s Fund for
SMEs:

(1) Special Relief Facility (SRF) – collateral free funding, objective: help SMEs
access working capital:
• Eligibility: Malaysian SMEs affected by COVID-19 outbreak
• Purpose: Working capital
• Rate: Up to 3.50%
• Max Amount: RM1 million
• Max Tenure: 5.5 years including 6 months of moratorium
• Availability: Until December 31, 2020
(2) All Economic Sector (AES) Facility 5 objective: enhance access to finance to
support growth:
• Eligibility: Malaysian SMEs
• Purpose: Capex or working capital
• Rate: Up to 7%
• Max Amount: RM5 million
• Max Tenure: 5 years
(3) Micro Enterprises Facility (MEF) – objective: access to collateral-free
microfinancing
• Eligibility: Malaysian micro enterprises
• Purpose: Capex or working capital
 Malaysian Government Business Support for SMEs 301

• Rate: Set by financial institutions

• Max Amount: RM50,000
• Max Tenure: 5 years
(4) Agrofood Facility (AF) – objective: increase Agrofood production
• Eligibility: Malaysian SMEs in Agrofood activities
• Purpose: Capex or working capital or development of Agrofood projects
• Rate: Up to 3.75%
• Max Amount: RM5 million
• Max Tenure: 8 years
(5) Automation and Digitalization (ADF) – objective: encourage SMEs to
automate processes and digitalize operations
• Eligibility: Malaysian SMEs
• Purpose: Buy equipment, hardware, software, and services
• Rate: Up to 4%
• Max Amount: RM3 million
• Max Tenure: 10 years
• Availability: Until December 31, 2020
The term Malaysian SMEs use by Bank Negara Malaysia (BNM) under
BNM’s Fund financing facilities refer to the definition of SME as approved by the
National Entrepreneur and SME Development Council (NESDC) with at least
51% held by Malaysians.

7. Monitoring of Government Supports and Assistances

In order to make sure all PRIHATIN and PRIHATIN PLUS initiatives are
implemented promptly and smoothly, the unit LAKSANA has been established
under the Ministry of Finance. This unit will monitor and report the progress of
implementation of all initiatives to the Minister of Finance. The IMSME.com.my,
which is a portal managed by Credit Guarantee Corporation (CGC) in collabo-
ration with BNM, has been established to support the execution of the PRIHATIN
initiatives.
So, other than applying for loans directly from the banking institution, all
SMEs have an option to apply for loans through the IMSME portal. This portal
provides myKNP services, that is, financing advisory services for SMEs. Among
small and micro enterprises, the government is also concerned about startups,
where investors have retreated during this period. Startups are the enabling and
push factors for the adoption of technology and advancements of human
potential to prepare the nation toward IR 4.0. Realizing the importance of
startups, the government is considering various initiatives to boost this sector
during this challenging time of pandemic crisis of COVID-19.
Despite more than a dozen supports and assistances provided by government
and entrepreneurial agencies to help SMEs overcome the pandemic crisis of
COVID-19, most SME entrepreneurs lack a clear understanding of these policies
and have no idea how to make proper use of them. Supportive policies should
302 Azrain Nasyrah Mustapa and Armanurah Mohamad

take into account differences across sectors to be more relevant to their specific
needs; they should also be more transparent if they are to deliver helps directly to
the SMEs entrepreneurs they aim to help overcome the crisis.

8. Suggestions for SME Recovery from COVID-19

Pandemic Crisis
This section gives suggestions for SME recovery of COVID-19 pandemic crisis to
help their business sustain and be competitive in the market. In this difficult
period of pandemic crisis of COVID-19, SMEs need to capitalize the opportu-
nities offered by the government’s Economic Stimulus Package and other zero
interest rates through the RM500 million Micro Credit Scheme under Bank
Simpanan Nasional. To grasp this opportunities, entrepreneurs should register
with government agencies such as the Inland Revenue Board (IRB) and the
Companies Commission of Malaysia (SSM) so that all government assistance and
funding access from financial institutions could be enhanced. SMEs can easily
obtain financial assistance and guidance from government agencies and banking
institutions if they become part of the formal economy (SME Corps. Malaysia,
2020).
Next, SMEs have to revisit their business model so that the model is relevant to
the current situation. Entrepreneurs need to be smart in their approach and shift
toward digitizing their business as well as seizing training opportunities and offers
announced by relevant agencies, including the Malaysia Digital Economic Cor-
poration Malaysia (MDEC) and SME Corp (SME Corps. Malaysia, 2020).
Several business recovery methods should be taken by SME. This includes inte-
grating a better way to serve consumers which in turn can enhance and strengthen
the company’s revenue.
At the moment, the most important thing is that companies from different
sectors need to adapt their business to the current situation, including changing
their business direction to suit to the new norm era and digitalize their businesses
to various aspects in enhancing SMEs’ competitiveness. Entrepreneurs are
encouraged to be more creative and proactive in seeking new and evolving
business approaches to digitization.
SME business recovery due to COVID-19 pandemic crisis is also suggested by
CPA Australia (Digital News Asia, 2020), as follows:

• Focus on improving cash flow and your financial health

• Utilize technology and online sales to meet changing consumer behavior
• Capitalize on your existing pool of loyal customers
• Investigate the SME relief measures announced by the government, especially
as Malaysia’s small business were the least likely to report easy access to
finance in 2019
• Dedicate any spare time you may have to developing and implementing a
recovery plan, and learning about industry trends and emerging technologies
and how they can be applied to your business
 Malaysian Government Business Support for SMEs 303

• Ask staff with any downtime to undertake training so they are better skilled to
meet the recovery needs of your business
• If you are in a relatively strong financial position, keep an open eye to any
opportunities that may emerge in the recovery
• Seek professional advice

The suggestions given here will help SME entrepreneurs to move forward
and take quick actions to safe their companies in this difficult time of pandemic
crisis.

9. Conclusion
Many business supports and assistances are provided by government and entre-
preneurial agencies to help SME entrepreneurs overcome their business problem
impacting from the pandemic crisis of COVID-19. The business supports and
assistances provided by the government should be relevant to SME-specific needs.
This helps should be given directly to the SME entrepreneurs that they aim to help
overcome the SME business crisis. Besides, business supports and assistances
provided to SME entrepreneurs should also be monitored so that it is used effi-
ciently by SMEs for the purpose of their businesses.

References
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pakej-rangsangan-ekonomi-prihatin-rakyat-prihatin/
Bernama. (2020, April 10). MCO extended until April 28- PM Muhyiddin. Retrieved
from https://web.afrchive.org/web/20200411001322/https://www.bernama.com/en/
general/news_movementorder.php?id51830577. Accessed on May 7, 2020.
Bernama. (2020, March 25). MCO period extended to April 14-PM. Retrieved
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