Kota Kinabalu: Sabah’s small and medium enterprises (SMEs) are on the brink of collapse, facing an urgent cash flow crisis caused by soaring fuel prices, rising logistics costs, and ongoing supply chain disruptions, said Sabah Entrepreneurs Transformation (Set) founder and Chairperson Datuk George Lim.
“Many businesses are struggling to sustain daily operations as margins shrink and operating expenses surge, placing those with limited cash reserves at immediate risk of downsizing—or permanent closure—if urgent intervention is not provided,” he said on Monday.
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He stressed that this is a critical moment for SMEs, as many are viable businesses with strong demand but squeezed by short-term financial pressures.
“Without swift action, we could see widespread closures and significant job losses,” he warned.
George stressed that stabilising cash flow must be the immediate priority, putting emphasis on fast-track loan approvals within 48 hours, simplified financing based on cash flow rather than heavy collateral, and expanded access to micro-loans with low or zero interest.
“These measures are essential to keep SMEs operating and preserve jobs,” he added.
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Beyond short-term relief, Datuk Lim highlighted the importance of supporting SMEs to diversify their markets. By expanding into ASEAN, regional, and tourism-linked markets, as well as strengthening export readiness and digital channels, these will help reduce dependency on limited local demand and unlock new revenue streams.
He added that targeted interventions, such as subsidies for logistics and fuel costs and efforts to strengthen local supply chains, are also crucial to reducing structural vulnerabilities.
“Sabah must move towards a more self-sustaining and efficient SME ecosystem, supported by improved infrastructure, collaboration, and digital adoption,” he noted.
Additionally, George warned that failing to act swiftly could result in widespread SME closures, job losses, and long-term economic damage.
He said ensuring fast access to financing and market expansion opportunities can stabilise the SME sector and build long-term resilience.
“Stabilising SMEs today is critical not just for protecting jobs and sustaining supply chains, but for securing Sabah and Malaysia’s economic future,” he concluded.
