On the 28th of May 2021, the Prime Minister announced that Malaysia will be under a full lockdown from the 1st of June until the 14th of June and; then extended for another 2 weeks until the 28th of June.

The government listed down various types of businesses that are not allowed to operate during the total lockdown or Movement Control Order (MCO) 4.0. Businesses that are allowed to open can operate from 8 AM – 8 PM only, said Datuk Seri Ismail Sabri Yaakob. Other activities such as dine-ins, park and dine concept, photography, cyber cafes, horse racing, recreational activities, casinos as well as gaming and lottery companies are not allowed to operate.

Many industries have been impacted by the MCO 4.0 especially the Small-and-Medium Enterprises (SMEs). Mainly essential services are allowed to open with time limitations during the lockdown.

IMPACT OF MCO

There are positives and negatives to the MCO as shown below:

(1) Changing Consumer Behavior

The way of life for Malaysians has possibly changed as they are now more comfortable with online shopping. This is due to the acceptance of cashless/contactless transactions.

(2) SMEs Financial Challenges

SMEs are more vulnerable than large firms when afflicted by the COVID-19 pandemic. They face several financial issues which include cash flow shortfalls, delays in receivables and delays in revenue, and also downtime in daily operations.

(3) Drop in Retail Sales

As COVID-19 cases in Malaysia jumped to historical highs since January this year, people have been avoiding enclosed places such as shopping malls.  As such, many retailers have been adversely affected. (Refer to Table 1 below)

TABLE 1: YEAR ON YEAR PERCENTAGE CHANGE IN RETAIL SALES (WEIGHTED), 2020/21

SUPPORT BY THE GOVERNMENT FOR SMEs

(1) Pemerkasa Plus

SMEs that previously received a Prihatin Special Grant (PSG) will receive a further RM500. This translates to an increase in the grant’s total payout to RM1,500 for each recipient since the Covid19 pandemic started.

The Companies Commission of Malaysia (SSM) has also extended the payment due date for companies that renew their business license until 31st December 2021.

The government has also provided a special income tax deduction to landlords that provide a rental reduction of at least 30% to SME and non-SME tenants until December 31, 2021.

*Click here to know more initiatives by the government

(2) Extension of Electricity Discount for Selected Sectors

Relevant sectors will receive a 10% discount on their electricity bill starting from July 2021 to September 2021.

(3) Relief for Loan Repayments for SMEs

SMEs are given a choice to either accept an automatic approval for 3 months deferment of loan repayment or to take a 50% reduction on the loan repayment for the next 6 months starting from 1st of June 2021.

To find out more, click this link: LOAN REPAYMENT ASSISTANCE

WAYS TO SURVIVE DURING THIS PERIOD

(1) Optimize Business Spending

Reducing costs is the most impactful way to continue streamlining the business during this pandemic.

(2) Learn How to Pivot and to Digitalise

Pivoting means that you shift to a new strategy or to address something that may not be working well within your company. This is also the perfect time to embrace technology and to digitalise one’s business and operational models.

(3) Get Help from Government

The Prime Minister has unveiled the Pemerkasa Plus financial aid package for Malaysians. This is a helpful support for SMEs in terms of shoring up finances.

(4) Contactless Deliveries

Especially for all Food and Beverage SMEs, this is the best practise to enable the customer to place orders and also to transact.

We are certainly experiencing difficult times but if we are resolute in adapting to challenges that life throws at us, we will definitely emerge from this stronger and better.

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