PETALING JAYA: Malaysia’s micro small and medium enterprise (MSME) sector, which accounts for close to 40% of the country’s gross domestic product, is on the brink of collapsing should the current nationwide lockdown continue indefinitely.

Based on a survey conducted by the Entrepreneur Development and Cooperatives Ministry (Medac), it is estimated that some 580, 000 businesses, representing 49% of the MSME sector, are at risk of failing by October if they are not allowed to start operations by then.


“The closure of the businesses, which are mostly in the first to close, last to open category, would also mean that more than seven million Malaysians are expected to be unemployed.

“Assuming that each worker has an average of two dependents, it will mean that another 14 million people will be affected by this situation, ” Medac said in a statement yesterday.


Medac Minister Datuk Seri Wan Junaidi Tuanku Jaafar said the failure to resolve the matter would have a devastating impact on the country’s socio-economic landscape, which will subsequently affect the overall well-being and happiness of the rakyat.


This is the hard truth that needs to be voiced out in order for people to realise the dire situation faced by the local MSMEs and the urgent need to come up with the right remedial actions to address this issue, ” he said in the same statement.

“If we don’t do something to help them now, I am worried that many of these MSME will fail and will not be around to help rebuild the economy once businesses are allowed to open.”

Wan Junaidi added that failure of the MSME businesses as a result of the prolonged lockdown would create a domino effect, hitting the societies hard at the core and ultimately leading to a more serious social and economic impact.

Medac had conducted a survey from June 15 to June 28, to gauge the impact of the movement control order 3.0 on the entrepreneurship landscape in Malaysia.

A total of 6, 664 respondents from across the nation participated in the survey.

The survey revealed that many businesses are suffering a “business fatigue” syndrome and declining confidence as a result of the lockdown.

Medac said about one third of the respondents revealed that they did not receive the various assistance introduced by the government.

Wan Junaidi also said mental issues were among the areas of concern revealed in the survey, where nearly 60% of entrepreneurs suffer from at least one form of mental health condition during the lockdown.

“The top three factors affecting mental health conditions of the entrepreneurs are the decline and loss of income, debt and financing issues, as well as risk of business closure, ” he said.

Wan Junaidi explained many of the entrepreneurs are worried about their future, thus contributing to higher stress levels that are affecting their mental and emotional well-being.

He said more than 90% of these entrepreneurs had no insurance, while 70% had no safety nets to fall back on should they lose their jobs.

“The impact of the lockdown is not only affecting the economic aspect but also the social aspect as well.

“I am concerned that the longer businesses are not allowed to operate, the longer it will take to recover.

“People are becoming increasingly unhappy. They are unhappy because of financial issues as well as not being able to socialise. It is time we look at other holistic measures on how to deal with this other than a lockdown, ” he said.

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