MSMEs continue to depend on banks for financial support in 2024
KUALA LUMPUR: The Alliance Bank MSME Business Outlook Report 2024 Malaysia revealed a resilient landscape for Malaysian micro, small, and medium enterprises (MSMEs) as business sectors are starting to experience a return to pre-pandemic revenue figures over the past year.
To further grow and expand their business in 2024 onwards, MSMEs will look to banks for their capital needs as they ramp up sales and marketing efforts with increasing focus on digitalisation tools to boost productivity for further growth.
On the digital front, the report highlighted that MSMEs’ digital ambitions are high on their priority list and over the next 12 months, this segment is planning to adopt various digital tools to enhance business productivity and ease day-today administrative tasks: 19.7 per cent plan to implement cash flow management; 15.9 per cent aim for social media management platforms and 14.6 per cent look to adopt accounting-related tools.
Given MSMEs’ appetite for digital tools and funding, the banking sector plays a pivotal role in supporting their growth aspirations and digitalisation plans, helping them to spur the next phase of growth.
“We are accelerating efforts to support MSMEs at every stage of their business journey by providing them with timely and differentiated solutions to meet their dynamic needs.
“This focus outlined in our Acceler8 strategy introduced in January 2023 has enabled the Bank to maintain a robust momentum in the business banking segment,” said Raymond Chui, group chief SME and commercial banking officer of Alliance Bank.
The biggest concern for MSMEs when it comes to growing their businesses is insufficient cash flow. They are looking into bridging the cash flow gap primarily through bank loans (49.7 per cent), investor funding (22 per cent) and peerto-peer (P2P) financing solutions (13.2 per cent).
Due to the nature of their business or market segment, MSMEs are mostly looking for banks to offer faster loan application processing, simpler documentation requirements and low interest rates.
While MSMEs require financial support from banks to grow their businesses, they also look for non-financial assistance such as business/networking events (17.4 per cent), coaching/ upskilling sessions (12 per cent), and digitalising their enterprises (12 per cent).
“The MSME segment, who are important contributors to the economy and for the creation of job opportunities, face unique challenges accessing financing as they typically lack adequate collateral and credit history.
“To help them in their growth journey, we continue to refine and enhance our credit approach and come up with inclusive solutions to meet their needs and support their earliest growth journey.
“As part of our journey in becoming our customers’ lifelong partner, we also look at supporting them beyond their financial needs to accelerate their growth journey,” Chui added.
“One such example is the Alliance Bank’s BizSmart Solution, a digital business ecosystem that helps MSMEs to access a broad suite of solutions and services at preferential rates, reach out to new customers and access a range of online resources.”
The Alliance Bank MSME Business Outlook Report 2024 Malaysia is derived from insights gathered from a survey of over 200 MSMEs, offering a sectoral view of the goals, challenges, and needs of MSMEs in Malaysia.
Following the Bank’s brand purpose to be “The Bank For Life”, this commitment extends through the entire MSME business lifecycle, ensuring that businesses receive the support to grow further and achieve long term success through our innovative solutions.