FORMER finance minister Lim Guan Eng has called on the government to implement immediate financial relief measures to support Malaysia’s struggling small and medium-sized enterprises, warning that many are at risk of collapse amid intensifying global economic pressures.
The Democratic Action Party adviser said he has submitted a formal proposal to Prime Minister Datuk Seri Anwar Ibrahim, outlining a five-point plan aimed at stabilising the sector, which he described as being in “survival mode”.
Central to the proposal is a RM5 billion financing initiative offering interest-free and collateral-free loans of RM50,000 each to 100,000 micro, small and medium enterprises, designed to provide immediate liquidity relief.
According to Lim, the recommendations were presented during a recent leadership meeting of the Pakatan Harapan coalition, as businesses grapple with rising costs linked to geopolitical tensions in West Asia and surging global oil prices.
In his letter, Lim warned that approximately 1.1 million SMEs are facing acute financial stress and may be forced to shut down by the end of the year without swift government intervention.
He said the government remains the key source of support to ease cost pressures and sustain business activity during the downturn.
Among the additional proposals are a temporary moratorium on interest payments for existing loans from financial institutions, as well as a suspension of new tax measures and compliance-related cost increases.
These include halting the expansion of the Sales and Services Tax, delaying the rollout of e-invoicing requirements, and suspending the two per cent Employees Provident Fund contribution for foreign workers introduced late last year.
"Besides that, it should be made mandatory for all domestic and foreign investors to source 50 per cent of their supplies from local manufacturers unless such goods are unavailable in the domestic market.
"The fifth proposal is to relax bureaucratic procedures and strict enforcement during this period of crisis," he said.
Lim also highlighted worsening liquidity constraints across the sector, driven by supply chain disruptions, volatile raw material prices and rising logistics costs.
"Suppliers of raw materials are unwilling to extend credit terms of one to three months, instead insisting on cash transactions.
"Without raw materials, SMEs are unable to produce their goods. This complicates the financial situation of many SMEs, which are already struggling to cover other costs that have surged sharply," he said. - April 11, 2026
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