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COVID-19 cry for help from the nation's SMEs - Muslim Business Network

COVID-19 cry for help from the nation's SMEs - Muslim Business Network
Deserted shophouses and empty streets: Business owners are deprived of income throughout the MCO period and finding difficulties to pay employees wages as required under the law. - Astro AWANI
MUBIN with its 500-strong members stands fully united with the people of our beloved nation in facing this unprecedented pandemic of such extraordinary magnitude. We know that everyone, especially in the medical and security frontlines, is braving the odds to help Malaysia overcome this grave tribulation. We note and fully support the help extended to our medical front liners, private and public sector employees, households and sectors directly impacted by COVID-19 such as the tourism industry. These do not go unnoticed. 

We would like however to highlight the plight of employers especially those in the small and medium-sized categories, which typically employ between five and 100 people and who form the bulk of the Muslim Business Network (MUBIN) membership. They are badly hit. And many are in despair as they do not have the resources to sustain their operations. They cannot open their businesses because of the MCO.  They cannot get paid because clients who owe them also cannot open for business.  Neither can they meaningfully utilise their staff to work from home, especially those in the retail, services and hospitality industries.  Worse, they cannot even go overseas to do business! As this statement is being prepared, there are already indications that the MCO might be extended. (Editor’s Note: The MCO has been extended to last a further two weeks until April 14).
Decision-makers in the government have to also take note that political uncertainty also leads to business lethargy.

There were numerous cases of indecision and delays of various projects before and after GE14 which adversely impacted small and medium-sized businesses including many belonging to our members. Hence, many were already in dire straits even before the advent of COVID-19. And many are already fighting for survival trying to cope with relentless demand letters from SSM, EPF, JKDM and LHDN, amongst others.
We are fully cognizant of the fact that this pandemic-induced tough business environment is not unique to Malaysia.  Other countries are also badly affected, some much worse than us. But we can only note with envy how their respective governments have taken special interest in protecting small and medium-sized businesses.  Australia pledges outright subsidies of $25,000 for their SMEs and 50% subsidy for hiring apprentices. The French government provides 70% gross wage reimbursement (84% of nett). One MUBIN member with an operating branch in Korea was granted a subsidy of 75% towards  wages! The list goes on.
We do note that the government has come up with its own stimulus package. However, what we are witnessing here in terms of government help to date is far from satisfactory.  Assistance in terms moratorium of current loans and special loans with low interest rates for qualifying SMEs is of course welcome.  We note the help extended specifically to companies, big or small, directly impacted by COVID-19, especially hotels and airlines. For the loan assistance, however, unreasonably restrictive terms are being imposed. A member company whose business was not profitable in the last audited year, after many years of profitability, applied but was immediately rejected on the basis of that one year of non-profitability!
MUBIN and others await with anxiety the government’s response to the dire predicament SMEs are finding themselves in. Is help again going primarily to the big boys like the conglomerates and banks as was the case in the late 1990s? Or are we going to see a more equitable distribution in terms of aid? As it stands, SMEs contribute to the tune of RM522 billion in terms of GDP (2018) and employ two thirds of the Malaysian workforce. Are they expected to further shoulder the responsibility of funding the MCO? If employers of this sector are not supported in this very trying period, MUBIN anticipates dire consequences will ensue.
We urge the government to do what is right and not what is convenient. The unilateral decision of the government forcing SME employers to pay full wages during the MCO is politically expedient.  It makes workers happy and yet the costs are not borne by the government.  But if this continues without government intervention, then we have signed a death warrant for tens of thousands of businesses and potentially millions of jobs! And as much as we understand the necessity of the MCO, MUBIN respectfully urges the government to engage business NGOs and chambers of commerce to craft out both short term and sustainable solutions for the betterment of the business ecosystem in these trying times.

Footnote: MUBIN is a 500-member forum for Muslim business owners operating primarily in the small and medium-sized enterprise sector.

* Mohd Adam Said is Group CEO and Principal Consultant of Profess Consulting Group and also Acting President of MUBIN

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI