The Malaysian Institute of Economic Research (MIER) has welcomed the Prime Minister’s announcement of a RM200 million Geran Sejahtera MADANI to support hawkers, small traders, night-market operators and mothers running home-based businesses.
The additional RM1 billion in microfinancing, which brings the total allocation for 2026 from RM5 billion to RM6 billion, also provides timely assistance to segments of Malaysia’s micro-enterprise community that often face greater difficulties accessing formal financing.
According to MIER, these measures can help strengthen the support available to smaller businesses, particularly those that may not have the same access to funding as larger enterprises.
Higher e-Invoice Threshold to Ease SME Compliance
MIER also welcomed the increase in the annual revenue threshold for mandatory e-Invoice implementation from RM1 million to RM3 million.
By exempting businesses with annual revenue not exceeding RM3 million, the measure is expected to reduce compliance costs and administrative requirements for many small and medium enterprises (SMEs).
For smaller businesses, reducing the administrative burden associated with regulatory requirements could allow entrepreneurs to focus more of their resources on running and growing their businesses.
However, MIER said that funding and regulatory relief alone will not address the longer-term challenges facing Malaysia’s MSME support ecosystem.
Tackling Fragmentation Across Support Programmes
MIER identified the fragmentation and overlap of support programmes across ministries, government agencies and financial institutions as a key challenge.
While substantial funding is already available, better coordination is needed to simplify access, reduce duplication and ensure that support reaches the right businesses at the right stage of development.
The institute also called for greater emphasis on outcomes rather than simply measuring the amount of funding disbursed.
While quantum-based funding targets may satisfy institutional key performance indicators (KPIs), MIER said the effectiveness of support should increasingly be assessed through indicators such as business survival, productivity, income growth and employment creation.
Support should also help micro-enterprises achieve greater sustainability or, where appropriate, graduate to larger-scale financing and markets.
A More Integrated ‘One-Stop’ Approach
MIER proposed a more integrated ‘one-stop’ information approach to help entrepreneurs identify and access the assistance most relevant to their businesses.
Such a system could bring together information on financing, grants, guarantees, digitalisation assistance, advisory services and skills development through a more coordinated platform.
A more organised funding ecosystem could also strengthen the quality of business assessment, monitoring and support.
Government agencies and private financial institutions have different capabilities when it comes to assessing business viability and potential. However, effective assessment and follow-up often require sector-specific knowledge that goes beyond standard eligibility and financial checks.
Not every institution has the capability to provide ongoing support or help businesses address operational difficulties, making greater coordination between different organisations particularly important.
Turning Funding Into Capability Building
MIER also highlighted the value of consolidating data, experience and institutional knowledge over time.
A roadside stall, for example, may succeed because of its location, while an experienced entrepreneur may have the instinct to identify such opportunities. Elements of this practical knowledge can nevertheless be formalised through better data, monitoring and analysis.
This could include areas such as location assessment, competition, pricing, cash-flow management, accounting and customer demand.
As a result, MIER said the funding ecosystem should serve not only as a source of capital, but also as a platform for capability building.
Entrepreneurs should have access to the basic knowledge needed to assess opportunities, manage their businesses and make informed decisions.
Moving Beyond the Quantum of Assistance
Looking ahead, MIER said Malaysia’s MSME policy should move beyond simply expanding the quantum of assistance towards building a more coordinated, accessible and outcome-oriented ecosystem.
The objective should be to provide the right assistance at the right stage of business development, while building institutional knowledge and capability and maximising the economic and social returns from public resources.
MIER believes that greater dynamism, resilience and capability among Malaysia’s MSMEs will strengthen their contribution to economic growth and help create a more diverse, competitive and resilient economy for the future.
