PETALING JAYA: The SME Sentiment Index for the first half of 2026 showed a moderation in MSME sentiment amid evolving economic conditions, Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank), a subsidiary of Bank Pembangunan Malaysia Bhd (BPMB) Group, said in releasing the survey findings on Wednesday.
Nevertheless, the survey showed that the operational outlook remains resilient as businesses continue to invest in digitalisation, productivity improvements and market expansion to support long-term growth.
The survey also highlighted emerging trends, priorities and opportunities shaping Malaysia’s MSME landscape.
SMEBank relief president and CEO Samad Majid Zain said, “As the backbone of Malaysia’s economy, MSMEs must continue to strengthen their resilience, productivity and competitiveness to navigate an ever-changing business and operating environment. Thus, businesses are placing greater emphasis on digitalisation and operational efficiency, reflecting a shift towards building stronger, more sustainable and future-ready enterprises.
“In line with Bank Negara Malaysia’s Performance Measurement Framework, these are critical enablers in strengthening MSME competitiveness, resilience and long-term economic contribution.”
He added that strengthening the resilience, competitiveness and long-term sustainability of Malaysian MSMEs remains central to SME Bank’s developmental mandate.
The commitment, he said, is reinforced through integrated financing and beyond-financing initiatives, including close to RM2 billion in strategic initiatives under Budget 2026, the SME Bank Relief Programme and its participation in Bank Negara Malaysia’s RM5 billion SME Stabilisation Relief Facility.
Some of the key highlights of the survey are that digitalisation becomes the top MSME priority, overtaking business expansion and marketing for the first time; cost pressures remain elevated, driven mainly by raw materials, transport, logistics and labour costs; cash positions improve across the MSME segment, with 70% of MSMEs reporting more than six months of cash reserves, although micro enterprises remain more vulnerable to liquidity constraints and targeted policy and financing support remain important to help businesses manage costs, accelerate digital adoption and strengthen business sustainability.
Digitalisation and technology adoption emerged as the top business priority, with 51% of respondents indicating a greater focus on technology investments to enhance productivity and efficiency. Access to financing also remains critical, with 51% of MSMEs identifying working capital financing as their primary funding requirement.
BPMBGroup macro-monitoring and analytics head Mazlina Abdul Rahman said, “While sentiment has moderated, the survey demonstrates that MSMEs remain focused on strengthening their fundamentals through digitalisation, productivity enhancement and market diversification, positioning themselves to navigate evolving economic conditions and pursue sustainable growth opportunities. As businesses adapt to evolving market conditions, many are also exploring opportunities to diversify revenue streams and tap into regional and international markets.”
She added that export-oriented businesses continue to demonstrate stronger sales expectations, with 55% expecting sales growth compared to 38% of domestic-oriented firms,while 61% of MSMEs intend to maintain their workforce and investing in operational improvements.
These trends underscore the adaptability of Malaysian MSMEs and their focus on long-term competitiveness and sustainable growth, said Mazlina.
Conducted between January and April, the survey garnered responses from 1,803 businesses across 40 sectors nationwide and provides insights into the challenges, priorities and growth strategies shaping the MSME landscape over the next six to 12 months.
