PETALING JAYA: The National Recovery Council (MPN) is currently putting their focus on the economic situation following the Covid-19 pandemic which has had severe impact on the micro, small and medium enterprise (MSMEs) entrepreneurs.

MSME-related issues and challenges are often discussed in MPN meetings so that every sector can get back on its feet and what has been recommended by the government can be acted upon immediately to support the development of the sectors again.

Extending MSME moratorium

MPN member, Datuk Michael Kang said that currently many MSMEs are facing cash flow problems. Hence, one of the ways to address these issues is to extend the loan moratorium and to formulate a special policy to ensure that there are clear guidelines and directions for MSMEs to get back-up.

He said the guidelines should include bank loans, aid applications, foreign worker applications, domestic and global supplies.

"During the Movement Control Order (MCO), most MSME were unable to operate due to constraints and at that time, some of the entrepreneurs had to downsize their operations and even worse, some had to shut down, too.

"MSMEs need the government's support and assistance. These entrepreneurs are currently having problems in their capital because they are unable to operate as before.”

He suggested that there should not be any legal action against businesses facing financial difficulties in rentals, loan repayment to suppliers and vendors for a period of at least one year.  This would ensure that MSMEs can get back on their feet as soon as possible.

"Among the worst affected sectors are those contractors in construction, tourism and manufacturing. If we look at our export industry, we can see that some foreign countries are already looking for new suppliers because we are unable to produce.

"Therefore, the government needs to take drastic measures and play a role in supporting the MSMEs," he said.

Shortage of workforce would cause business operation to be delayed

Michael, who is also the former President of the Malaysian SMEs Association (SME Malaysia) is also worried about the number of SME entrepreneurs falling out of their businesses.

One of the issues that MSME operators always raise is the lack of foreign labor in various sectors, especially plantations which are reported to suffer losses of almost RM20 billion in 2021.

He said, MPN was informed that 1,152,276 foreign worker quota applications were received for all sectors until last September but until now, only a total of 467,223 or 40.5 per cent of the quota were approved.

"Even though that quota was approved, till last September 12, only 76,000 foreign workers were brought into Malaysia to meet the demand of MSMEs. This is quite critical because the demand for labor is very high.

"Currently, we are lacking one million in terms of foreign workers. Bringing in another 500,000 would be enough, he said.

The government needs to establish a green lane policy specifically for the MSME sector. One of the emphasis in the policy is to simplify the application procedure for foreign workers.

Bureaucracy and red tape in some agencies can cause MSME operations to be delayed and eventually this would further impact the national economy.