Malaysia SME body Samenta calls for acceptance of IP as collateral for bank finance

Photo by Mohd Jon Ramlan on Unsplash

Malaysia should shift its approach to supporting small and medium enterprises (SMEs), with greater emphasis on innovation, productivity and competitiveness, the Small and Medium Enterprises Association Malaysia (Samenta) has said, proposing a raft of initiatives.

Its national president, Datuk William Ng, argued in an opinion piece for the Free Malaysia Today news outlet that it was time to stop treating SMEs as welfare recipients and instead build an ecosystem that rewards value creation and long-term growth.

He wrote:

“The entire ecosystem – comprising policymakers, financial institutions, and business leaders – must completely shift its approach from poverty alleviation to wealth creation. We need an ecosystem that moves past keeping businesses on life support and instead, ruthlessly rewards value-addition, innovation, and global competitiveness.”

As part of this shift, Samenta is calling for reforms to banking systems to allow the recognition of intangible assets such as intellectual property as valid collateral for bank lending, alongside land and physical assets.

Decrying the current “20th-century banking system for a 21st-century economy” where “our banking frameworks remain obsessed with brick-and-mortar collateral like land, factories, or personal guarantees,” Ng contrasts it with “a modern, service-driven and creative economy, [where] our best SMEs scale on intellectual property (IP), proprietary code, and human talent. Refusing to recognise intangible assets as valid collateral starves high-growth tech and service sectors of vital financing.”