Govt willing to discuss with Bank Negara to improve access to credit for SMEs to penetrate AEC

The government will discuss with Bank Negara Malaysia possible new measures to improve access to credit for small and medium enterprises so that they can be financialy stronger to take advantage of the ASEAN Economic Community which comes into effect next year.

Prime Minister Datuk Seri Najib Tun Razak, who chaired the 27th ASEAN Summit and Related Sumits which ended on Sunday, however said that Malaysia was ranked as one of the leading countries in terms of access to credit.

Nevertheless, SMES facing problems in obtaining loans should raise the matter with SME Corporation Malaysia for further improvement in access in financing," he told a press conference here.

Najib, who is also Minister of Finance, was responding to points that banks and financial institutions should adopt a fresh approach in financing SMES in view of funding difficulties they faced such as being asked for collateral which could possibly hamper them from exploiting the business opportunities arising from the single market under AEC.

The Prime Minister, who has always been passionate about helping SMES as well as micro enterprises, said: "We can discuss with Bank Negara to undertake new measures and improve access to credit with respect to SMEs."

He also encouraged SMEs to meet SME Corp to identify the problems that have been hindering them from obtaining financing.

"This could be on basis that their business model is not complete or that they do not know how to prepare a business plan," he said.

SMEs formed the backbone of ASEAN countries, making up 96 per cent of registered businesses, employing up to 97 per cent of the working population in ASEAN member states, contributing up to 85 per cent of the Gross Domestic Product (GDP) of countries in the region.

The sector contributed 28-58 per cent of ASEAN's combined GDP worth US$2.57 trillion.

The ASEAN Strategic Action Plan for SME Development (2016-2025) was launched at the ASEAN Business and Investment Summit Saturday as an extension of the achievements of the 2010-2015 Action Plan which charted six key policy dimensions.

Consisting of five strategic goals, each to be led by a selected ASEAN member state, the document is expected to strengthen cooperation among ASEAN SME development agencies and positively impact the development of domestic SMEs in respective economies.