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The Star

Reduce red tape for SME growth, urges MCA

PETALING JAYA: Excessive red tape imposed by banks for business loan approvals, such as high collateral or impractical credit assessments, are among the stumbling blocks to the progress of small and medium enterprises (SMEs), says Datuk Seri Dr Wee Jeck Seng. The MCA vice-president said the government should streamline assistance given to SMEs and end the bureaucratic red tape. He said entrepreneurs have repeatedly lamented that the issues they face are not inadequacies in supportive policies but the difficulty in accessing them. Such conditions, according to Wee, contradict the government's goal of assisting SMEs and often deprive those most in need of the aid. He said government assistance for SMEs must be fast, simple and practical. He welcomed the government's recent initiatives in response to the ongoing global economic turbulence, emphasi­sing the importance of effectively implementing these policies to reduce red tape and ensure aid reaches the SMEs. Wee said the announcement by Prime Minister Datuk Seri Anwar Ibrahim of several relief ­measures to mitigate the effects of the United States' reciprocal tariffs on global supply chains and SME exporters is timely for the industry. They include an additional RM1bil in government guarantees under the Business Financing Guarantee Scheme and RM500mil in soft loans via development financial institutions. 'The move is timely and necessary given the volatile international economic climate. 'If banks and financial institutions continue to apply out­dated, conservative approaches – complicated procedures, rigid requirements and high barriers – then the good intentions behind these policies will be significantly weakened,' said the Tanjung Piai MP in a statement yesterday. Wee noted that the effects of the US tariff policy are reshaping global supply chains and placing pressure on Asean economies, and Malaysia, being highly export-­dependent, is particularly vulnerable. 'The first to feel the impact are our SMEs, whose ability to absorb 'shocks' is much lower compared to larger firms. 'With global economic uncertainty rising, we cannot afford to rely solely on external ­reco­very. 'We must instead focus on strengthening domestic economic momentum. 'Such action includes creating jobs, increasing public investment and upgrading infrastructure – measures that are essential to stimulating internal demand and protecting livelihoods,' he said. Wee said additionally, the govern­ment should also accelerate the rollout of approved development projects, especially those tied to public welfare, such as flood mitigation, school repairs and the construction of new ­clinics. He said such initiatives not only benefit the public but also inject vitality and generate lasting economic value into the construction and related sectors. 'SMEs form the backbone of our national economy and are the largest source of employment. The government and private sector must engage in genuine collaboration to face the challenges ahead. 'Only with effective, inclusive mechanisms can we ensure resilience and steady progress during these trying times,' said Wee.