RM40.7 bln losses last year were the biggest losses in the SMSE sector so far - MEDAC

KUALA LUMPUR: The total of RM40.7 billion losses last year from the micro, small and medium enterprises (MSME) sector as a result of a nationwide strict lockdown order imposed by the government to tackle the COVID-19 issue were by far the biggest ever losses incurred by the sector.

Entrepreneur Development and Cooperatives Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar said this is a strong indication on how much the entrepreneurs are suffering from not being able to conduct their businesses.

Looking at the current 1.15 million registered MSME nationwide, the losses would mean that each MSME company incurred an average drop in earnings of RM35,000 for the year 2020, he said in a statement today.

This situation will also affect the country's aspirations to increase the MSMEs gross domestic product (GDP) and export value contribution to 50 and 30 per cent respectively in 2030 under the National Entrepreneurship Policy (NEP).

"Lockdown is no longer the answer to the problem. We have to accept the fact that we need to live with COVID-19 and find a balanced solution for this. That is why my ministry has proposed an Enhanced standard operating procedure (SOP) so that we are able to speed up the reopening of economic activities, particularly those in non-essential category" he said.

Based on the latest figures shared by the Department of Statistics Malaysia (DOSM), the MSME sector's GDP contribution suffered more than 7.0 per cent year-on-year decline to RM512.8 billion last year against RM553.5 billion in 2019, which was an anomaly as, for the past 15 years, the growth of MSME is always higher than non-MSME

The Ministry of Entrepreneur Development and Cooperatives (MEDAC) on Tuesday had submitted to the government a proposed Enhanced SOPs to help speed up the opening of businesses, particularly those in the FCLO (First to Close Last to Open) category, safely.

"Almost half of the business activities identified are owned by women entrepreneurs, among the groups most affected by the nationwide lockdown," it said.

-- BERNAMA