KUALA LUMPUR: Micro, small and medium enterprises (MSMEs) continue to depend on banks for financial support to further grow and expand their business in 2024.
The Alliance Bank MSME Business Outlook Report 2024 highlighted that there is a resilient landscape for MSMEs, with various sectors beginning to see a return to pre-pandemic revenue levels over the past year.
According to the report, the biggest concern for MSMEs when it comes to growing their businesses is insufficient cash flow.
They are looking into bridging the cash flow gap primarily through bank loans (49.7 per cent), investor funding (22 per cent) and peer-to-peer (P2P) financing solutions (13.2 per cent).
Due to the nature of their business or market segment, MSMEs are mostly looking for banks to offer faster loan application processing, simpler documentation requirements and low interest rates. While MSMEs require financial support from banks to grow their businesses, they also look for non-financial assistance such as business or networking events (17.4 per cent), coaching/upskilling sessions (12 per cent), and digitalising their enterprises (12 per cent).
Alliance Bank group chief SME and commercial banking officer Raymond Chui said given MSMEs' appetite for digital tools and funding, the banking sector plays a pivotal role in supporting their growth aspirations and digitalisation plans, helping them to spur the next phase of growth.
"The bank is accelerating efforts to support MSMEs at every stage of their business journey by providing them with timely and differentiated solutions to meet their dynamic needs.
"This focus outlined in our Acceler8 strategy introduced in January 2023 has enabled the bank to maintain a robust momentum in the business banking segment," he said in a statement.
Chui also said the MSME segment, who are important contributors to the economy and for the creation of job opportunities, face unique challenges accessing financing as they typically lack adequate collateral and credit history.
To help them in their growth journey, he said the bank continues to refine and enhance its credit approach and come up with inclusive solutions to meet their needs and support their earliest growth journey.
