MSMEs Must Scale Up Their Operations, Productivity To Offer Higher Wages - Akmal Nasrullah
KUALA LUMPUR, Nov 11 (Bernama) -- Micro, small and medium enterprises (MSMEs) must scale up their business operations and improve productivity, creating demand for higher skilled workers and providing better-paying jobs, said Economy Minister Akmal Nasrullah Mohd Nasir.
He said the focus should now shift from the quantity to the quality of financing provided to MSMEs to ensure that businesses are able to grow and remain competitive.
“The presentation by the World Bank today pointed to the need to move beyond focusing on the quantity of financing but instead to look at the quality of funds channeled to MSMEs.
“In terms of access to funds, for Malaysia (the situation) seems good. But the real issue is the quality of the funds being given out, because it is not just about them getting credit but how our firms can remain competitive at the global level, especially to achieve higher productivity, which will translate into higher wages and quality jobs,” he said.
The minister was speaking to reporters after the launch of the World Bank’s October 2026 Malaysia Economic Monitor, “From Quantity to Quality: Financing Malaysia’s Productive SMEs”, here today.
Citing the World Bank Group report, Akmal Nasrullah said about 38 per cent of firms have a loan or credit line, while the loan approval rate rose from around 68 per cent in 2015 to 86 per cent in 2024.
However, he said, the aggregate access figures do not mean that every firm, especially a smaller or innovative one, can secure suitable financing.
“The next stage is about quality, not just quantity. The question is whether firms can access financing that meets their investment needs and supports higher productivity,” he said.
Citing the report further, Akmal Nasrullah stated that SMEs finance roughly two-thirds of their fixed-asset investment from internal funds and external financing remains heavily reliant on bank debt, while equity and other forms of risk-bearing capital are limited.
Conventional collateral requirements, often centred on land and buildings, can disadvantage firms whose assets include machinery, receivables, software and know-how.
He said the April Economic Monitor found that bank financing accounts for around 28 per cent of fixed investment among small and medium-sized firms, compared with around 50 per cent among large frontier firms.
According to the minister, this points to the need for financing that better responds to firms with growth potential.
“The comparison underlines the need to examine whether financing arrangements are sufficiently responsive to firms with growth potential, rather than assuming that credit availability alone is enough,” he said.
Asked on claims that NVIDIA artificial intelligence chips have been diverted to China via a third nation in Southeast Asia, Akmal Nasrullah said the matter is believed to be still under investigation by United States authorities.
He added that the issue is more closely related to the Investment, Trade and Industry Ministry.
-- BERNAMA