Small and medium enterprises (SMEs) play a significant role in Malaysia’s economy, contributing to 37.4% of the GDP and 47.8% of employment in 2021. Mid-tier companies, though fewer in number, also play a vital role. The approximately 10,000 MTCs in Malaysia collectively contribute around 40% of the country’s GDP and employ over 16% of the workforce.
However, despite their importance, SMEs and MTCs in Malaysia face challenges in accessing financing. The traditional forms of financing, such as banks and financial institutions, often require collateral and a solid financial track record, making it difficult for many SMEs to meet the strict criteria. Furthermore, the pressure to maintain stringent capital requirements in the banking sector could further hinder small and mid-tier companies’ ability to raise funds in the future, especially for financing high-risk investments such as R&D activities or investments in new technology.