MORE small and medium enterprises (SMEs) are expected to close shop and lay off worker under an extended movement control order (MCO), SME Association of Malaysia president Michael Kang said.

Speaking on a webinar hosted by Research For Social Advancement (Refsa) today, Kang said a prolonged period of shutdown beyond April 14 will see some SMEs cease operations and commence with retrenchment.

Putrajaya should decide from the start how long to enforce the MCO instead of making periodic extensions so that SMEs can plan head, he said.

“Today a lot of people had hoped to start operating on April 14, but now it has been extended for another two weeks.”

Prime Minister Muhyiddin Yassin today announced that the MCO will be extended to April 28. 

Kang said he was told by some SMEs that they could not apply for extensions when the MCO was extended as the International Trade and Industry Ministry had stopped accepting applications. 

The association is looking into ways to work with the government to resolve the problem, he said. 

He called on Putrajaya to expedite the approval process for applications for the financial aid announced in the Prihatin economic stimulus package, as many SMEs have limited cash in hand. 

He hoped the government would also ease the application process for micro credit loans.

“It is the third week now and a lot of SMEs are struggling with cashflow as the full banking ecosystem is not there.

“If they can’t withdraw, it will be a problem for SMEs to survive,” he said.

Kang said a recent survey by the association found about 70% of such organisations are operating with limited cashflow. 

Kang urged the government to allow more SMEs in more sectors to operate partially as many are suffering from loss of income. 

He said partial operations will help sustain the companies in case there are delays in the disbursement of loans.  – April 10, 2020.