The Small and Medium Enterprises Association of Malaysia has welcomed the government’s commitment to eliminate the long-standing practice of political support letters, “cables” and insider influence in the approval of financing for small and medium enterprises (SMEs).
In a statement, the association expressed support for recent remarks by Prime Minister Datuk Seri Anwar Ibrahim and Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong, who pledged to dismantle political patronage and strengthen governance in the distribution of government financing.
SAMENTA said the culture of rent-seeking and politically influenced funding approvals has, for decades, distorted Malaysia’s entrepreneurial ecosystem by diverting financial assistance away from deserving businesses.
The association said public funds should be allocated based on the commercial viability and capabilities of entrepreneurs rather than political connections, warning that financing awarded through political intervention not only disadvantages genuine SMEs but also contributes to higher non-performing loans at agencies tasked with supporting business development.
Echoing the Prime Minister’s stance, SAMENTA said government financing should be reserved for entrepreneurs with genuine commitment and capability, describing attempts to bypass proper governance through political support letters as detrimental to the country’s economic development.
While acknowledging that many government agencies have introduced digital application systems to improve transparency and reduce manual intervention, SAMENTA noted that these systems could still be manipulated by individuals with insider knowledge of the approval process.
To further strengthen governance, the association called on financing agencies to publish regular reports on recipients of government funding, together with high-level data on approval rates, average processing times and sectoral default rates to improve transparency and public accountability.
SAMENTA also urged the government to establish a transparent whistleblowing mechanism to enable individuals with information on malpractice, collusion or cronyism to report such cases to the Malaysian Anti-Corruption Commission (MACC) or integrity units within the relevant ministries without fear of retaliation.
The association said it stands ready to work closely with the Ministry of Entrepreneur Development and Cooperatives (KUSKOP) and its agencies to ensure political patronage is eliminated from the financing ecosystem so that government assistance reaches SMEs based on merit rather than connections.
