THE Alliance Bank MSME Business Outlook Report 2024 underscores the ongoing dependence of micro, small, and medium enterprises (MSMEs) on financial support from banks to foster business expansion.
Highlighting a resilient landscape for MSMEs, the report notes that various sectors have shown signs of returning to pre-pandemic revenue levels over the past year.
According to the report, the primary concern for MSMEs in growing their businesses remains insufficient cashflow.
To bridge this gap, they are predominantly seeking avenues such as bank loans (49.7%), investor funding (22%), and peer-to-peer (P2P) financing solutions (13.2%).
MSMEs predominantly require banks to offer faster loan application processing, simplified documentation requirements, and competitive interest rates, aligning with their business nature or market segment.
While financial assistance from banks is crucial for business growth, MSMEs also seek non-financial aid.
This includes participation in business or networking events (17.4%), coaching/upskilling sessions (12%), and digitalisation of their enterprises (12%).
Alliance Bank group chief SME and commercial banking officer Raymond Chui said 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.
“The bank is 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,” he said in a statement.
Chui also said 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, he said the bank continues to refine and enhance its credit approach and come up with inclusive solutions to meet their needs and support their earliest growth journey.
Source: https://themalaysianreserve.com/2024/03/27/msmes-rely-on-banks-for-growth-in-2024/