SMEs still reeling financially from effects of MCO

Source: Malay Mail

Kuala Lumpur, May 22 - Even as restrictions were eased to allow selected economic sectors to operate, a survey done among local service-based small and medium-sized enterprises (SMEs) showed how these entities, despite resuming operations, are still facing financial strains and inconsistent market demand triggered by measures taken to contain the Covid-19 outbreak.

According to the study conducted by local home services online platform :

“The majority of SMEs reported facing financial difficulties (60.3%) while operating during CMCO, and 48.3% experienced customer delays or cancellations, reducing their potential revenue.

“(A total of) 41.4% also reported that job sites were blocking entry. These are mainly condominiums or gated neighbourhoods.

Other main problems these SMEs ran into once they opened Percentage (%)
Contracting Covid-19 31
Bearing the costs of Covid-19 test for their workers 27.6
Dealing with demanding customers who insist on adherence to government standard operating procedures (SOPs) 24.1
Insufficient manpower (due to a big number of local and foreign workers having returned to their hometown or home country) 24.1
Employers’ concerns of staff health 22.4
Inconsistent supply of raw materials 19

Companies remain closed

Almost half (48.5%) of the companies who decided to remain closed said it was due to the financial strain brought upon by the two months of business disruptions under the MCO that began on March 18, with 42.4% of saying they stayed closed due to the unclear and shifting government policies.

A total of 36.4% of those who remained closed:

  • would wait until the CMCO was fully lifted to resume operations, as 27.3% refrained from opening fearing their own health, with 21.2% saying they were worried about adhering to the strict SOPs.
Other reasons kept them closed Percentage (%)
Facing police roadblocks despite there not being any at inter-district level 15.2
Lack of manpower 15.2
Cost of Covid-19 testing required for staff 12.1
Denied entry into job sites 12.1
Concerns of employees’ health 6.1
Dealing with demanding customers 6.1
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So as a business owner, what is your opinion with this issue? You should open or close your business during MCO?