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Sunday, September 25, 2022
HomeSocial NewsMicro SMEs Could Collapse Causing 7 million To Lose Jobs

Micro SMEs Could Collapse Causing 7 million To Lose Jobs

A minister has sounded the alarm if the lockdown were to prolong, the state of micro- small- and medium-sized enterprises (MSMEs) could soon collapse.

In a statement, the entrepreneur development and cooperatives ministry said a recent survey found that around 580,000 businesses, or 49% of the MSME sector, could collapse by October if operations do not resume by then.

Should these businesses close, it said more than seven million Malaysians would become unemployed, with each worker assumed to have an average of two dependents each.

Its minister Wan Junaidi Tuanku Jaafar said this was the “hard truth” on the dire situation people were facing, adding that the right remedial actions were urgently needed.

He added that he is worried that the failure of these MSME businesses due to the prolonged lockdown will create a domino effect, hitting the societies hard at the core, leading to a more serious social and economic impact.

Many Malaysians were becoming more unhappy due to the financial issues affecting them as well as the decline in social activity.

It is time to look at other holistic measures on how to deal with this, other than lockdowns.

The survey conducted by the ministry involving 6,664 respondents also found that one-third of those surveyed did not receive the various aid measures announced by Putrajaya.

Wan Junaidi also said the survey revealed that 60% of entrepreneurs were suffering from at least one form of mental health condition during the lockdown, due to a decline or loss of income, debt or financing issues and risk of closure.

He pointed out that more than 90% of the entrepreneurs had no insurance while 70% did not have a safety net to fall back on if they were to lose their jobs.

The impact of the lockdown is not only affecting the economic aspect but the social aspect as well.

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