PETALING JAYA: Putrajaya should specify how it intends to exit the health crisis as small and medium enterprises are anxious over the indefinite lockdown, a body representing SMEs said today.
SME Association of Malaysia president Michael Kang said more SMEs are closing down due to uncertainties, which may be a contributing factor to problems such as suicide.
Kang said he is receiving emails and messages from struggling SMEs riddled with debt.
Citing the latest email received today, Kang said the business operator could no longer pay staff salaries and rent.
“He owes suppliers and others debts of RM500,000. He can’t pay EPF (Employees Provident Fund) contributions, Socso, or anything else.
“This is the reality on the ground,” he said during a webinar organised by the United Nations Development Programme, which carried the theme “Building Back Better: Supporting Micro, Small and Medium Enterprises for a More Sustainable and Resilient Recovery”.
Asked by a participant about the current situation and prospects for SMEs in 2022, Kang said the government needed “plans” to exit the Covid-19 pandemic and a timeline for businesses to open.
“(The present) lockdown is extended indefinitely. There are no certainties, and this will cause more SMEs to shut down.
“This will result in more job losses and lead to worsening social problems,” he said, pointing to the increase in suicide cases.
“A lot of them owe money to banks, suppliers and others.”
He said most SMEs have earned no income since the start of the month due to the lockdown. “(For those) who made zero income in June, they cannot pay staff salaries or rent.”
He said SMEs are thankful for the financial packages offered by the government, but Putrajaya also needs to have exit strategies so that small businesses can continue operating.
Earlier this month, the association warned that 50,000 more SMEs would be out of business if lockdown measures were to be extended for another six months, and that about 100,000 companies had already ceased operations.
Saying that he hoped the economy will reopen next month, Kang added that the association is also working with the government to help SMEs move towards digitalisation as a way to market their products in the country and regionally.
Meanwhile, law lecturer Rachel Burgess of the University of Southern Queensland said a review of competition Acts and laws were needed to ensure that smaller companies were on a level playing field.
It would also promote economic development and protect competition, she said.
“Anti-competitive mergers need to be reviewed to see whether they should be allowed to proceed.
“It becomes uncompetitive if smaller companies are consumed into one body,” she said.
Source: https://www.freemalaysiatoday.com/category/nation/2021/06/29/lay-out-exit-plan-for-pandemic-and-lockdown-struggling-smes-tell-govt/