“While we are strong advocates of SMEs, SMEs must also demonstrate their capability to manage their finances effectively.
Zeti explained that if loans were extended to poor creditworthy borrowers, the banking sector would be affected. A fragile banking sector, she said, would be a drag to the country’s economy.
As it is, the current economic and regulatory environment remained supportive of SMEs in Malaysia to secure financing, Zeti pointed out.
“We are still having strong credit growth, which is expanding by 9%. Therefore, we believe there continues to be access to financing,” she explained.
According to Zeti, 40% of business loans in the banking system currently are given to SMEs, which demonstrated the extent of the focus and support given by banks for the sector.
Given the available infrastructure and schemes for the sector, Zeti said SMEs should consult with banks on how to be eligible for financing should they face difficulty in obtaining funds.
She pointed out that SMEs would benefit tremendously from the ongoing regional economic integration exercise to create the Asean Economic Community (AEC) by the end of this year.
“The next frontier for SMEs is to emerge as regional players that are not constrained by the domestic consumer base. SMEs possess the potential to participate in global production networks by riding on Asean’s intrinsic strengths and prospects, multiple SME-focused policy initiatives as well as the continued wave of regional financial integration.
“This will allow for the transition for SMEs to benefit immensely from the ongoing regional economic and financial integration and thus contribute towards a balanced and sustainable growth of our region,” Zeti said.
According to Zeti, the recent drive for the greater economic and financial integration of Asean had paved the way for SMEs to expand and thrive.
Among others, she said, SMEs in the region had gained access to a larger and more extensive marketplace through Asean, while the lowering of regulatory barriers to trade within the region and increased connectivity had further increased the potential for SMEs.
Zeti said the drive towards greater financial integration in the region would be a new catalyst of growth for SMEs.