World Bank: Malaysian SMEs have less cash flow to withstand Covid-19 crisis

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World Bank: Malaysian SMEs have less cash flow to withstand Covid-19 crisis compared to peers in Indonesia, Vietnam

KUALA LUMPUR, June 24 — Malaysian firms beset by cycles of movement curbs are less equipped to withstand shocks compared to their regional peers, with less cash in hand to face a crisis like Covid-19, the World Bank said in its latest Economic Monitor report.

A median Malaysian company only has two months of cash flow left, while the average firm has about 4.9 months worth, which is lower than its counterparts in countries like Indonesia and Vietnam, the institution said, citing findings from its Business Pulse Survey that analysed the pandemic’s impact on businesses.

Malaysian companies, especially smaller and micro enterprises, now face pressing liquidity constraints as mobility restrictions hit both production and demand. Over half of those surveyed also said they are either far behind in debt repayments or face risk of falling into arrears.

“In addition, 60 per cent of firms are either in arrears or at risk of falling into arrears within the next six months,” the report said.

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