Micro MSE Companies Bullied, Government Should Take Actions

Ninety-seven percent of the entire companies in Malaysia fall under the category of Micro, Small, and Medium Enterprises (MSMEs). They contribute 38.4% to Malaysia's GDP and account for 48.2% of total employment as of the year 2022. The value added by these enterprises reached RM580.4 billion, which marks a substantial increase from RM520.0 billion in 2021.

While the majority of these companies are not luxurious and are currently enduring challenges, I have been referred to several micro bumiputra SMEs facing cash flow difficulties due to 'Red Tape' and harassment protocols by authorities, the government, and GLCs (Government-Linked Companies) and giant-sized corporations. Sometimes, these entities appear to be complacent in their responsibilities, displaying inefficiency and extreme slowness. They seem to be 'bullying.' I present three examples that have been reported to me:

1. There are clinics (whether private health clinics or dental clinics) that wish to open, but they must first obtain approval from the Ministry of Health (KKM) for the clinic's structure, design, and other aspects before commencing operations. However, these clinics must be renovated first, and later, an inspection by the Ministry of Health will be conducted. The PROBLEM is that this process takes too long. These clinics, after paying a significant amount for renovation, are compelled to pay monthly rent without being able to conduct any sales. This is detrimental to these small to medium-sized enterprises (SMEs) that are seeking to establish and expand.

2. Small and medium-sized factories and construction projects that require additional electrical resources need to have cables laid underground on government land for small power station cables. However, the process involving TNB (Tenaga Nasional Berhad, the national electric utility company) and local authorities, as well as state government entities, takes almost a year or more without being completed. For giant corporations, this may not be an issue, but for SMEs, their cash flow will 'dry up' due to monthly rents and other expenses while the factory and premises are still unable to operate. This situation could also be fatal to SMEs.

3. Some MSMEs are required to place deposits of tens of thousands with major financial institutions for short-term projects. However, after completing the tasks, these financial institutions are supposed to promptly return the deposits. Unfortunately, they hold onto the deposits for months. While the deposit amount may be relatively small from the perspective of these financial institutions and giant corporations, it's significant for the cash flow of a Micro SME. Ultimately, this inefficient practice will harm MSMEs.

This inefficient behavior also creates room for corruption or is even sometimes deliberately carried out in anticipation of bribes for corrupt deals as "lubricants" in our country. Therefore, authorities need to exert pressure on public servants and GLCs to enhance efficiency and integrity, and not inadvertently delay their mandatory tasks. An efficient and accessible digital complaint hotline should be established so that oppressed and marginalized citizens can promptly report their cases.

My sympathies lie with micro SMEs.

Dr. Zaharuddin Abdul Rahman

[email protected]