The Malaysian Micro Business Association (Mamba) has urged the government and financial ecosystem players to expand access to fund factoring and invoice financing solutions to support micro, small, and medium enterprises (MSMEs). The association highlights that cash flow constraints remain a major obstacle for growth in sectors with long credit terms and delayed payments.

Alvin Low Wei Yan, Mamba’s secretary-general, explained that many micro and small businesses deliver products and services upfront but often wait 60 to 120 days for payment. This delay strains operations, making it difficult to cover salaries, replenish inventory, or pursue new opportunities. Factoring provides immediate access to earned revenue, bridging this critical gap and helping businesses sustain operations.

Industry data emphasises the urgency of the issue. According to a 2025 Experian Malaysia report, average payment delays for SMEs are 64 days, with gaps of up to 26 days between SMEs and corporate clients in sectors such as transport and logistics. Mamba notes that awareness and adoption of factoring remain low, particularly among micro-entrepreneurs and suppliers to large corporations and government-linked companies, limiting growth potential in the sector.

Malaysia’s MSMEs contribute over 38% of national GDP and employ more than seven million people. The sector’s ability to scale effectively impacts economic stability and growth. The current MSME funding gap is estimated at US$21.5 billion (€20.4 billion / RM90.30 billion), highlighting the need for broader access to factoring and financing tools.

Mamba encourages stakeholders to consider fund factoring as a strategic tool to improve liquidity and support sustainable growth in the Malaysian MSME sector.

View the full story for detailed insights into Mamba’s recommendations and the sector’s financial challenges.