Strategies and Supports to Malaysian SMEs (MSMEs) Facing Covid 19: Road to Sustainability

Abstract

Small and medium enterprises (SMEs) are pivotal to the well-being of the Malaysian economy and society given that they provide jobs to 66% of the workforce and they contribute 40% to the GDP (FMT, 2022). Thus, it’s important for the SMEs to ensure their sustainability despite the Covid 19 crisis which has hit the world for almost 3 years. Since the pandemic began, more than 150,000 SMEs in Malaysia have shut down, leaving 1.2 million people jobless. The pandemic are affecting both larger and smaller firms but the effect to the SMEs are especially severe. The lack of business sustainability has increased their susceptibility to uncertainty, which could have been avoided if they had made it a priority to adopt their own set of sustainability goals in their operations and management practices. Besides proper sustainability strategies, SMEs also relied on the financial assistance provided by the government to ensure their survival. The Malaysian government are responsive and committed to help the SMEs in mitigating the impact of the pandemic. The government has allocated RM196 billion to assist the SMEs through various economic packages since March 2020 (The New Straits Times, 1 March 2022). Thus, the objective of this study is to determine the sources of financial assistance received by the Malaysian SMEs and the reliance on government support received to ensure their survival. It also reveals the sustainability strategies adopted by these SMEs. The study may assist in identifying the causes of the business not to perform during the crisis and to suggest some recommendations that should be taken into consideration in order to sustain their business.