Kuala lumpur: The government's RM5 billion financial guarantee initiative for the micro, small, and medium enterprises (MSMEs) is expected to provide a significant boost to the sector, particularly exporters, by strengthening their working capital and sustaining trade momentum amid current cost pressures.

According to BERNAMA News Agency, Malaysia External Trade Development Corporation (MATRADE) chairman Datuk Seri Reezal Merican Naina Merican emphasized that sufficient financing access is critical for export-oriented companies, as working capital remains a key requirement in maintaining operations and fulfilling international orders. He mentioned that the newly announced RM5 billion facility would have a meaningful impact on MSMEs compared to smaller financing allocations previously discussed, which were seen as insufficient to address the scale of current challenges.

Reezal Merican highlighted that the RM5 billion would assist MSMEs in financing their capital, which is crucial for companies involved in export. He expressed confidence that the financing would significantly impact MSMEs, especially in maintaining their working capital. During a media briefing on Malaysia's first-quarter 2026 trade performance, he stressed that continued spending is essential to avoid a contraction in business activity, urging companies to maintain operational momentum while ensuring better cost management.

He also pointed out the importance of focusing on reducing leakages to ensure that financial resources are utilized efficiently and effectively. Reezal Merican added that the financing support is timely in helping MSMEs navigate ongoing pressures while preserving Malaysia's export performance trajectory.

On Monday, Prime Minister Datuk Seri Anwar Ibrahim announced several measures to help MSMEs sustain operations amid the energy supply crisis and West Asia conflict, which have increased operating costs and disrupted supply chains. A key measure is the RM5 billion guarantee facility under Syarikat Jaminan Pembiayaan Perniagaan (SJPP), with financing coverage increased to up to 80 percent from 70 percent previously, and the guarantee tenure extended to up to 10 years from seven years.

Additionally, further assistance was announced today, comprising special facilities totaling RM5 billion under Bank Negara Malaysia to assist MSMEs.