Banks need to do more to help counter rising costs of living – Guan Eng

NEW funding initiatives are needed to stimulate more macroeconomic activities among small and medium enterprises (SMEs) to counter the rise in living costs and stagnation.

This comes amidst the unresolved geo-politics such as the Middle East conflict, said former finance minister Lim Guan Eng.

Lim said that the banking sector needs to play a larger role by increasing liquidity to underwrite the growth of the small and medium enterprises in the country, while also creating more employment opportunities to leverage against the current global uncertainties.

He pointed out that the banking sector's 13.5% hike, or RM6.5 billion increase in profit before tax to RM54.8 billion last year, meant that it can afford to dispense interest - free loans for the first RM50,000 and a one - year interest rate moratorium of existing loans for the micro to SMEs sector.

In Prime Minister Datuk Seri Anwar Ibrahim’s written reply in Parliament on 6 July 2026, he confirmed that the banking industry’s profit before tax for 2025 rose by 13.5% or RM 6.5 billion from RM48.3 billion in 2024 to RM 54.8 billion in 2025.

Lim confirmed that his proposal to require the banking industry to impose a one-year interest rate moratorium on existing loans for MSMEs and offer an interest-free loan for the first RM 50,000 was rejected.

"Whilst more loans are indeed made available to MSMEs, the critical question is rising costs to MSMEs, which have been adversely affected by the global economic slowdown and oil price hikes caused by the Middle East conflict," said Lim.

The time has come for the banking industry to step away from its blind pursuit of the bottom line and instead step up and do its Corporate Social Responsibility, in this time of need for its MSME loan customers, he said.

"I will continue to press and try to convince the Prime Minister that banks must do the right thing not only for the survival of SMEs but also on behalf of the economic health of the nation."

Earlier, Lim also said that the government needs to review the decision not to pursue the transparent disclosure of the shareholdings of the former Malaysian Anti-Corruption Commission (MACC)'s former chief commissioner, Tan Sri Azam Baki. - July 9, 2026.