KUALA LUMPUR – MSMEs (micro, small and medium enterprises) should take care of cash flow and grow from global business opportunities in order to bounce back from the events caused by COVID-19.
Chairman of Perdana Leadership Foundation’s board of trustees, Tan Sri Azman Hashim said that MSMEs must maintain their operations’ cash flow because it would lead to business failure.
Speaking at the Perdana Leadership Foundation SME Leaders Programme 2022: Knowledge Exchange for Entrepreneurship Excellence launch recently, Azman explained that the pandemic had shown that businesses were hampered by economic conditions and movement restrictions and this is why cash flow plays an important role.
“Cash flow is important for both small and big companies and we can see big businesses and hotels getting shut down as they cannot sustain their businesses and this results in asset disposal,” he continued.
During his speech, he also touched on the Regional Comprehensive Economic Partnership (RCEP) providing international business opportunities for MSMEs and is advantageous for companies looking to grow.
“The initial zero tariffs among RCEP countries is already a significant step and could have a significant impact on MSMEs,” he added.
Upgrade and improve
Also at the event was the secretary general of the Ministry of Entrepreneur Development and Cooperatives, Datuk Suriani Ahmad.
Her address included remarks that MSMEs should always be upgrading themselves especially their skills and knowledge while at the same time, adopt new technology and innovative business methods for growth to continue.
She stated that the pandemic added more challenges for Malaysia’s economy and further exposed the gaps that are in the local entrepreneurship ecosystem. Since COVID-19 hit, MSMEs are forced to accept changes in consumer and business cultures.
“COVID-19 has highlighted the necessity of embracing technology. MSMEs need to acknowledge that technology and digitalisation are no longer differentiators but a need to stay relevant and competitive especially post-pandemic.
“Digitalisation and tech adoption would help speed up MSMEs development in embracing the new norms in business activities which would help minimise costs and improve efficiency and productivity,” she continued.
Additionally, she also said that MSMEs are forced to step back, review, realign and reset how they conduct business since the pandemic has brought on substantial losses to SMEs. The movement controls and global supply chain disruption had resulted in an economic downturn.
“Challenges such as lack of access to working capital and inability to secure credit, poor productivity from inefficient processes, low research and development expenditures, difficulties in adopting technological solutions and lack of accessibility to international markets and knowledge networks have created hurdles for MSMEs grow, stay stagnate and in the worst-case scenario, lose everything they worked for,” she stated.
There are more than 1.2 million or 97.44% MSMEs in Malaysia scattered over a variety of sectors. To date, MSMEs have created jobs for 7.2 million people and accounts for 38.2% of Malaysia’s gross domestic product.
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