Image credit: NST
KUALA LUMPUR: Micro, small and medium enterprises (MSMEs) expect revenue growth this year despite economic uncertainties, according to Alliance Bank MSME Business Outlook Report 2025.
The report revealed that local MSMEs are resilient and focused on digitalisation as well as sustainability as key drivers of growth.
It said 79 per cent of businesses expect growth this year, driven by strong domestic demand and accelerated digital adoption.
Despite the optimism, rising operational costs and cash flow constraints remain as key challenges, prompting many businesses to seek external financing to fuel expansion.
"MSMEs are the backbone of Malaysia's economy, and their confidence in the face of global headwinds is a testament to their agility and ambition. As a bank with a long-standing relationship with the MSME sector, we recognise that they face distinctive needs and challenges at different stages of their business journey.
"As their trusted lifelong financial partner, Alliance Bank remains committed to empowering MSMEs with fast, seamless, and collateral-free financing solutions to scale their businesses sustainably, ensuring they build strong fundamentals for long-term success," said Alliance Bank group chief business and transaction banking officer Raymond Chui.
The survey gathered insights from over 230 MSMEs across various industries.
As MSMEs look to expand, 69 per cent of those polled anticipate the need for external financing in 2025, with bank loans being the most preferred option.
The report highlighted that businesses that seek financing in 2024 faced challenges, particularly with lengthy approval processes.
To address this, Alliance Bank has enhanced its SME financing solutions to make business loans more accessible and hassle-free.
The bank said solutions such as Alliance Digital SME Express Financing and Alliance Digital SME Cash Flow Financing provide collateral-free loans and flexible repayment terms of up to seven years.
In addition, 75 per cent of MSMEs plan to invest in digital tools to improve productivity and customer engagement.
The report also highlighted growing sustainability awareness, with 58 per cent of MSMEs planning to implement environmental, social and governance (ESG) practices in their operations this year.
Alliance Banks said a key challenge in ESG adoption is the lack of guidance as cited by many businesses.
"Beyond financing, MSMEs are increasingly recognising the value of digitalisation and sustainability but many require the right support and resources to navigate these transitions.
"At Alliance Bank, we are not just a financial partner – we are committed to guiding businesses throughout their business lifecycle, offering innovative financial solutions, strategic partnerships, and expert guidance that help them succeed in an evolving business landscape," Chui added.
Source: https://www.nst.com.my/business/corporate/2025/03/1193582/msmes-expect-higher-revenue-despite-uncertainties-survey