BREAKING NEWS   Banjir di Johor : Tangkak daerah kelapan dilanda banjir, mangsa seluruh negeri meningkat 4,868 orang setakat 8 pagi - JPBN | 
BUSINESS

National Recovery Council concerned about continuity of SMEs in endemic transition period

04/11/2022 02:24 PM

KUALA LUMPUR, Nov 4 (Bernama) -- As the end of 2022 nears, small and medium enterprises (SMEs) are still facing various challenges despite the economic recovery in the transition period to the endemic phase. 

Among the major challenges are the uncertainties in the global environment such as rising inflation, as well as higher energy costs via electricity tariffs that are hampering the sector’s recovery and competitiveness.

The National Recovery Council (MPN) is concerned about the problems faced by SMEs, especially those facing cashflow problems amid rising interest rates.

According to Tan Sri Sulaiman Mahbob, the chief executive officer of the MPN secretariat, the SME sector was the worst hit during the COVID-19 pandemic compared to multinational companies which have the capability to relocate to other countries with lower wages.

Hence, the MPN has come up with several proposals to the government, such as facilitating loans to them as well as introducing a moratorium specifically for SMEs, which form the backbone of the country’s economy and contributed 37.4 per cent to the gross domestic product in 2021.

The owner of Taska Oren Enterprises, Norafizah Md Hassan, which operates seven childcare centres in the Klang Valley, said her company is facing a cashflow problem as it is still recovering from the effects of the lockdown during the pandemic.

Her company’s income plunged 50 per cent during the various movement control orders (MCO) in the country, which started in March 2020, as some parents stopped sending their children to her centres as they started to work from home, she added.

“Before COVID-19, many parents sent their children here regularly but now it is ad-hoc and payments are on a daily basis, so the income is declining,” she told Bernama. 

Her company has arrears in rental payments, various utility bills, and Employees Provident Fund (EPF) contributions as it prioritises salary payments to its 42 workers.

Norafizah said a moratorium is appropriate when companies face cashflow problems, and reiterated that banks should offer a moratorium without interest and the repayment period not be extended.

Natrah Noor, the owner of Teluk Cempedak Inn Maya Abaya, a homestay in Kuantan, Pahang, is also struggling to maintain her daily operations.

During the lockdowns, she had to close her business and consequently had to get a RM75,000 loan to finance her operations and pay her workers.

When the country’s borders were fully reopened on April 1, business returned to her homestay.

“However, the number of tourists is not as high as before the pandemic. Previously during school holidays, all our rooms would be fully booked, but now there are still empty rooms as people are more cautious in their spending,” she noted.

However, Natrah said she would not opt for a moratorium as she is worried about extra costs imposed by the banks and that she also wanted to settle her loan as fast as possible.

Huspalita Hussain Arif, the owner of bakery Cheesylogy Enterprise, said his business is starting to feel the impact of rising costs.

“The sales are normal but income has declined by about 20-30 per cent because of rising costs such as raw materials and electricity tariffs,” Huspalita said, adding that the minimum wage of  RM1,500 has also impacted operations, apart from the more cautious spending seen among consumers due to high inflation.

-- BERNAMA

 


BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; www.bernama.com; BERNAMA TV on the Astro 502, unifi TV 631 and MYTV 121 IFLIX channels and BERNAMA Radio on the FM93.9 (Klang Valley), FM107.5 (Johor), FM107.9 (Kota Kinabalu) and RM100.9 (Kuching) frequencies.

Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial

© 2023 BERNAMA   • Disclaimer   • Privacy Policy   • Security Policy