According to the latest official data published by the Department of Statistics, Malaysia (DOSM), MSMEs accounted for 96.1% (1 086 386 firms) of all business establishments in Malaysia in 2024. This marks an increase of nearly 180 000 firms compared to 907 065 in 2015, reflecting an average annual growth rate of 2.0% over the period.
Credit conditions remained supportive of businesses’ financing needs, as financing to businesses grew by 5.1% in 2024 (2023: 3.7%). Of this, outstanding SME financing growth continued to remain strong at 8.1% in 2024 (2023: 8.7%), supported by continued disbursements mainly for working capital purposes. MSME financing approvals also recorded higher approval rate of 81.5% as compared to 2023 with 80.9%.
The total value of SME outstanding stock of loans has more than tripled in the last decade and a half, surging from MYR 141 billion in 2010 to MYR 418 billion in 2024 (2023: MYR 386 billion). The share of MSME financing within total business loans has expanded markedly from 38% in 2010 to 51% in 2024, indicating that MSMEs now account for more than half of all business lending, a notable increase from the pre-pandemic level of below 45%.
In 2024, Malaysia’s central bank, Bank Negara Malaysia (BNM) prioritised initiatives which assisted businesses, especially MSMEs to build business resilience, improve access to finance and transition to green practices. BNM also directed efforts at raising financial literacy levels and understanding on-the-ground financial inclusion challenges to ensure effective interventions. The year 2024 recorded sustained momentum in MSME financing approvals, with over MYR 193 billion approved, an increase from MYR 187 billion in 2023, which reflects the continued confidence of financial institutions in supporting MSME growth and expansion.
Efforts to promote alternative financing to provide options and diversification to MSMEs have been amplified. The Securities Commission Malaysia (SC) continued to put efforts in spurring the growth of alternative financing as well as shoring confidence in this area. For the year 2024, a total of MYR 4.1 billion was raised via peer-to-peer (P2P) financing, equity crowdfunding (ECF) and venture capital/private equity (VC/PE), reflecting growing interest in supporting small businesses.
Among key market development initiatives introduced by SC in 2024 was the ‘Catalysing MSME and MTC Access to the Capital Market: 5-Year Roadmap (2024-2028)’ aimed to intensify efforts to advance this segment.