KUALA LUMPUR (Nov 19): Some 67% or two-thirds of Maybank's small and medium enterprise (SME) customers revealed in a survey that they had successfully integrated digital technology into their sales platforms during the Movement Control Order (MCO) 3.0 period.
In a statement, Maybank said MCOs and social distancing measures have driven SMEs to reorganise their business models by bringing their operations online and to social media platforms and e-commerce marketplaces to remain in business and overcome supply chain disruptions.
About 84% of Maybank's borrowing SME customers took part in the survey conducted between September and October this year, with respondents hailing from sectors such as wholesale and retail trade, real estate, manufacturing, and construction.
Maybank, who currently serves almost 60% of all SMEs in Malaysia, said the survey was part of a broader exercise to better understand how the MCO 3.0 affected its SME clients in five categories — financial, technology, business, supply chain and people. It was also to enable the bank to gauge their financial health and identify additional assistance for its clients.
Meanwhile, 33% of the SMEs surveyed were unable to adopt digital technology due to reasons such as the nature of their business not being suitable for online platforms, lack of technical knowledge, high cost of implementation, unsuccessful attempts in using digital platforms, highly competitive line of business, lack of awareness about digital solutions offered in the market, and the refusal to use digital solutions.
According to Maybank, the key challenges SMEs experienced during the MCO 3.0 were: a drop in demand (34%), a delay in receivables (31%), a shortage or delay in obtaining supplies (18%), adapting to new operations and processes (11%) and insufficient workforce (6%).
The MCO 3.0's impact on the respondents' sales was clear, as 61% experienced a decrease in sales, while only 25% saw their sales remain unchanged, with 14% reporting better sales due to their agility in business strategy and quick response to market needs.
On workforce management, 80% of SMEs did not undertake any retrenchment due to a lean business set-up, and they planned to retain their existing skilled and experienced workforce critical in supporting their business continuity. Whilst 72% of the respondents did not exercise salary cuts while the remaining 28% which did mainly cited shorter operating hours as the reason, the statement wrote.
According to the survey, 99.6% of the respondents were still operating, while 21.2% had to temporarily close during MCO 3.0, with 0.4% having closed their businesses. Around 61% reported having cash flow that could sustain them for more than seven months if the movement restrictions continued, while around 24% could sustain themselves between four and six months and 15% only for three months or less.
And 97% of respondents indicated that they were able to continue with their repayment obligations, either based on their obligations pre-pandemic or under new terms from repayment assistance programmes, while 37% of these respondents would be monitored closely for potential vulnerabilities or challenges they might experience in meeting repayment obligations.
Maybank also noted its SME customers had experienced an increase in operating cost and cash margin squeeze, while some had experienced negative impact due to a drop in demand or delay in receivables or supplies.
"As we continue to support our customers through our financial solutions, the group simultaneously initiated the Maybank SME survey with the intention to analyse and resolve the pressure points faced by them. Since SMEs are the nation's economic backbone, employing almost half the workforce and contributing close to 40% of Malaysia's gross domestic product, it is critical that we render appropriate assistance — not only through financing but also other areas such as enhancing their digital presence, operational efficiency and so on," said Maybank's community financial services group chief executive officer, Datuk John Chong.
"Maybank has the capabilities in these areas such as through our digital payments and Sama-Sama Lokal platforms, as well as online Biz apps and financing capabilities which can boost SME businesses with minimal or no cost," he added. "Now that we have granular data from our survey, we will offer our SMEs the appropriate help to leverage the opening up of the economy and to meet the pent-up demand that is expected to emerge in the coming months," Chong added.
Chong also said the bank will continue to assist SME clients by extending additional loans to support their growth momentum and providing fast access to loans by leveraging Credit Guarantee Corp and Syarikat Jaminan Pembiayaan Perniagaan guarantees, as well as by offering digital solutions.
For clients who are unable to pay their commitments, Chong said the bank could assist in leveraging government-aided funds to extend their loans and provide other financial alternatives and digital solutions such as Sama-Sama Lokal, a zero-commission online marketplace as well as Maybank2u Biz app to ease SMEs' business management and banking all in one platform.