SMES SHOULD RE-EVALUATE STRATEGIES AFTER OPR HIKE -- SME BANK

KUALA LUMPUR, May 19 (Bernama) -- Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) has urged small and medium enterprises (SMEs) to re-evaluate business strategies to remain competitive in the current economic climate, in light of the overnight policy rate (OPR) hike by Bank Negara Malaysia (BNM) to 3.0 per cent.

In a statement today, SME Bank group president/chief executive officer Datuk Wira Dr Aria Putera Ismail said that under the SME segment, strong expansion was observed in the application for financing for the first quarter of 2023 (1Q 2023), at 21.1 per cent year-on-year (y-o-y) versus 4Q 2022 at -0.1 per cent y-o-y, which signals that SMEs’ demand for financing is still healthy.

“Given that the present monetary policy stance is slightly accommodative and supportive of the economy, SMEs which face challenges arising from higher financing costs should review their business strategies to improve efficiency and productivity. 

bootstrap slideshow

“This may include managing operational costs, exploring new revenue streams, diversifying their customer base or employing new pricing strategies,” he said.

Meanwhile, SME Bank chief economist Lynette Lee said five out of 17 sub-services sectors are still lagging, namely food and beverage, real estate, and wholesale trade. 

“The recovery momentum for the tourism-related industry is expected to continue given the ongoing shift in consumption from goods to services. 

“Although economic growth in 2023 will still be driven by resilient domestic demand, SMEs need to be vigilant and agile as we expect some moderation in the growth trajectory amid rising external headwinds, waning pent-up demand and high base effect from last year,” she said.

-- BERNAMA