KUALA LUMPUR, Dec 22 (Bernama) -- Small Medium Enterprise Development Bank Malaysia Berhad (“SME Bank”), a subsidiary of Bank Pembangunan Malaysia Berhad (“BPMB”) Group has released the findings of its SME Sentiment Index for the second half of 2025 (“2H 2025”), signalling a stronger economic momentum and rising optimism across the country’s MSME landscape. The overall Sentiment Index rose to
56.8, compared with
55.1 in 1H 2025, reflecting improved expectations on economic conditions, sales prospects, expansionary activities and employment despite elevated external pressures.
SME Bank’s Relief President and Chief Executive Officer, Samad Majid Zain said
“Malaysian MSMEs continue to demonstrate remarkable resilience, supported by stronger economic fundamentals and opportunities ahead. The rise in the Sentiment Index with
68% of respondents expecting higher sales and
53% planning to expand their workforce, reflects a more positive operating climate even as the business community navigates higher external import tariffs, wider Sales & Services Tax (“SST”) application and adjustments in electricity costs. The strongest optimism is recorded among manufacturing segments, where up to
89% of businesses anticipate growth. These trends signal that MSMEs are preparing for increased demand and renewed investment activity. SME Bank will continue to support MSMEs in strengthening their financial position, improving productivity and enhancing competitiveness as Malaysia advances toward sustainable economic growth.
Key Highlights at a Glance:·
Growth optimistic sectors underscore consistency with strategic national objectives.·
Expansion plans strengthen sales outlook, with optimism reaching up to 89% in sectors preparing for increased market activity.·
Operating costs remain elevated as policy adjustments take effect, prompting MSMEs to intensify cost control and efficiency measures.·
Workforce expansion is gaining momentum, with 53% of MSMEs planning to hire in line with improving demand expectations.·
Technology adoption continues to drive performance, with wider use of digital tools enhancing productivity and competitiveness.·
Improving cash reserves across MSMEs, although micro enterprises remain the most vulnerable due to tight liquidity conditions.SME Bank’s Head of Economic Analysis, Mazlina Abdul Rahman said, “The findings provide a clear and timely view of the evolving risk landscape. While
58% of enterprises expect the economy to expand, the variation across business sizes remains significant. Micro enterprises are the most optimistic at
65%, whereas only
44% of medium sized firms expect growth, reflecting the impact of rising costs and external uncertainty. Liquidity conditions have improved, with the proportion of MSMEs holding less than six months of reserves declining to
31% from
34%, and those with reserves beyond three years increasing to
15%. Yet financing appetite remains high, with
81% of respondents planning to obtain funding for working capital or expansion. These insights allow SME Bank to calibrate risk assessments with greater precision and ensure that our support remains responsive, prudent and aligned with sector realities.”
The SME Sentiment Index survey was conducted between
July to October 2025 and gathered responses
from 1,971 entrepreneurs and business owners across 40 sectors and all business sizes. The survey offers comprehensive insight into business sentiment and remains a key reference point for assessing Malaysia’s economic trajectory.
The full SME Sentiment Index 2H 2025 report can be accessed at:
https://www.smebank.com.my/documents/d/guest/sme-sentiment-index-2h-2025Click here for more info: https://go.smebank.com.my/SMESI Issued by:
SME Bank Strategic Communication
SOURCE: SME BankFOR MORE INFORMATION, PLEASE CONTACT: Name: Arnee Ismail
Head, Strategic Communication
SME Bank
Tel: +603 2603 7700 / +6019-6633390
Email: communications@smebank.com.my
--BERNAMA