Role of CGC in rural growth lauded
Published on: Sunday, September 15, 2024
By: David Thien
Masidi receiving a memento from CGC Chairman Dato’ Mohammed Hussein (right) accompanied by CGC CEO Datuk Mohd Zamree Mohd Ishak (left).
Kota Kinabalu: The growth of Micro, Small, and Medium Enterprises (MSMEs) in Sabah’s rural areas are crucial to boost the rural economy through nascent industrialisation, jobs to mitigate rural – urban migration as well as to boost income of rural residents through entrepreneurial development and support creating employment, incomes, and livelihood opportunities, particularly for the poor and marginalised groups.
Sabah Finance Minister Datuk Seri Panglima Masidi bin Manjun, at the recent Credit Guarantee Corporation Malaysia Bhd (CGC) Appreciation Dinner praised the pivotal role of CGC in this aspect.
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“I applaud CGC for its commitment to addressing the financing needs of MSMEs.
“CGC has evolved from a traditional credit guarantee provider to a financially sustainable institution, offering guarantees, financing, and non-financial advisory services to MSMEs.
“The potential collaboration between CGC, the Sabah Government and GLCs can significantly benefit MSMEs by providing financial support and guarantees, developing joint training and capacity-building programmes, improving infrastructure, promoting sustainability initiatives, and offering advisory and monitoring services,” Masidi said.
According to him, “MSMEs are essential to the economic prosperity of our beloved Sabah and the nation which currently constitute 97.4 per cent of the country’s business enterprises.
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“CGC’s latest 2023 Annual Report shows it has provided over RM95.4 billion in financing over 380,000 MSMEs since its inception on July 5, 1972.
“This demonstrates CGC’s unwavering commitment to ensuring the success of Malaysian MSMEs through its sustainable initiatives in providing customized financial solutions and strategic guidance.
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“Financial institutions remain SMEs’ main source of financing, providing more than 90 per cent of total financing.
“The provision of SME financing is also complemented by the Development Financial Institutions, Bank Negara’s Fund for SMEs, and Government Funds.
“This financing is made possible with the support of CGC in providing various guarantee schemes. A sound credit guarantee scheme is important in filling the financing gap for small and medium-sized enterprises, which CGC has been delivering since its inception in 1972,” he said.
According to Masidi, in today’s digital age, two essential focus areas stand out: Artificial Intelligence (AI) and Environmental, Social, and Governance (ESG).
He said therefore, MSMEs should adopt AI as a transformative tool to streamline processes, reduce operational inefficiencies, improve output quality, and maximise profitability.
Business models must align with sustainability goals to stay relevant in global value and supply chains, Masidi emphasized.
“To the MSMEs in Sabah, your resilience and innovation are the backbone of our state’s economy.
“As you continue to navigate challenges and seize opportunities, remember that your contributions are vital to our collective growth and prosperity.
“With the support of initiatives like Sabah Maju Jaya and collaborations with organisations like CGC, you have the tools and resources to thrive.
“The growth of MSMEs in Sabah is a testament to the resilience and determination of our entrepreneurs.
“The state government remains committed to supporting these enterprises through financial aid, capacity building, and market expansion initiatives.
“With partners like CGC, we will continue to create an enabling environment for our MSMEs to flourish,” he said.
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