Stable Economy To Boost MSME Outlook In 2026, Says SJPP

PUTRAJAYA, Jan 16 (Bernama) -- Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) expects 2026 to be a better year for micro, small and medium enterprises (MSME), supported by a more stable economic environment and the re-expansion of financing support to diverse business segments.

SJPP principal officer Datuk Fazlur Rahman Zainuddin said this is also driven by the government’s continued support via the business financing guarantee scheme and the housing credit guarantee scheme, helping MSMEs boost business growth through reinvestment in new technology, automation, digitalisation, and capacity expansion.

“We hope that MSMEs will seize the opportunity to improve their businesses in terms of reinvesting in technology, new technology, automation, digitalisation or expanding their companies, perhaps opening another factory or branch,” he said.

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He said this to the media after the launch ceremony for the Budget 2026 Initiative -- Allocation for the Business Financing Guarantee Scheme and the Housing Credit Guarantee Scheme here on Thursday.

Fazlur Rahman said that in 2025, 14,000 small and medium enterprises (SMEs) received financing approvals worth RM14 billion, despite the financing performance for the year showing a slight fall compared to the previous year.

He said that in 2024, total financing approvals reached RM18.5 billion, including financing for mid-tier companies, before declining in 2025 following a shift in SJPP’s focus and global economic uncertainty.

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“This decrease is due to two main factors. Firstly, in 2025, we are not focusing on the mid-tier company segment. Notably, in 2024, financing approvals for that segment were around RM3 billion to RM4 billion.

“Secondly, the economic uncertainty in 2025, including the tariff issue, caused many MSMEs to adopt a wait-and-see approach,” he said.

He said the resolution of tariff issues, as well as a more stable global economic environment, are expected to pave the way for more positive prospects in 2026.

“For 2026, we expect the (economic) situation to be better than 2025, as the re-entry of mid-sized companies -- especially export-oriented firms -- would serve as catalysts for the supply chain, vendors and contractors among MSMEs," he said.

Meanwhile, Fazlur Rahman said the government guarantee allocation has been increased to RM30 billion for SJPP and RM20 billion for Syarikat Jaminan Kredit Perumahan Bhd (SJKP), in line with the government's aspiration to expand access to financing for SMEs and first-time home buyers.

“I encourage SMEs and first-time home buyers to visit the nearest bank branch to obtain further information on government guarantees, thus increasing the chances of financing approval,” he said.

MSMEs benefiting from SJPP’s financial guarantee

Sharing experiences as SME beneficiaries of SJPP’s financial guarantee during the event were Bubble O2, Tonasco Holding and Sri Korakkar Agro Products.

Bubble O2 managing director Ain Azizah Arifin said the natural oxygenated mineral water company had grown rapidly since its establishment in 2019, and now handles end-to-end operations from water source extraction to bottling, logistics and digitalisation.

“SJPP has helped a lot when we started. As a small company, the machinery price could reach half a million ringgit. With SJPP's guarantee, it really eased our cash flow,” he said, adding that the company’s plant had expanded twice and is now planning to open a third factory in Pahang.

Bubble O2 is currently exporting its products to Brunei and the United Arab Emirates, and is expanding into the ASEAN and Middle East markets.

Meanwhile, Tonasco Holding group managing director Sheau-Wei Lin said the company, an export-oriented manufacturer in the high-technology sector, first engaged with SJPP in 2018–2019 when it applied for the Malaysian Investment Development Authority’s grant to develop its smart factory.

“With the grant, we launched our own smart factory development. That required significant investment in software and automation machinery.

“Even with government support, we still had to fund part of it ourselves, and that was when the banks introduced SJPP to us,” she said.

Lin said the guaranteed financing allowed the company to accelerate automation and upgrade its production systems, which is crucial as demand from its semiconductor clients continues to rise.

“Moving forward, we are entering the next phase of expansion as our main customers, particularly in Europe, are ramping up.

“With many supply chains relocating or expanding in Malaysia, this next phase will require new investments,” she said. 

Managing director Pitchaimani A/L Machendran said Sri Korakkar Agro Products, established in 2010, imports a wide range of pulses and essential food ingredients, including black mung beans, green beans, peas, dhal and various flours used daily by restaurants and food manufacturers.

“As our distribution grew, we needed additional working capital. When we approached the banks, they introduced the SJPP scheme.

“SJPP helped guarantee our purchases of raw materials from overseas, which was extremely helpful in expanding our presence in the local market,” he said.

He added that the support enabled the company to scale its operations and meet the demand of major retail chains and food businesses.

-- BERNAMA