Are Banks “Really” Helping MSMEs?

 

The turmoil in the oil market due to the Iran war has disrupted supply chains across many economies around the world. There is barely any country insulated from the effects of this supply chain-driven crisis. Malaysia, while a net energy exporter (oil and gas), remains a net importer of crude oil. This effectively means that our country’s economy is also affected by the supply chain crisis, with inflationary pressure creeping and unemployment rate spiking. 

In April, unemployment rate jumped 20% to around 7,000 people losing their jobs. The cracks are showing. Micro, small and medium enterprises (MSMEs) are again the most impacted category with cash-flow constraints, with some estimated to have an average runway of only six months amid the ongoing uncertainty. 

Source: https://www.wikiimpact.com 

MSMEs make up 40% of the country’s gross domestic product and employ nearly 48% of the workforce. We are seeing many announcements, including a RM5bil special funding allocation under the SME Stabilisation Relief Facility to help affected businesses manage their cash flow. Another would be the RM5bil guarantee facility provided by Credit Guarantee Corp Malaysia Bhd and Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP), bringing total support for the MSME sector to RM60bil. 

Speaking from personal experience, I have seen disappointing encounters when seeking bank financing for clients. The financing in green renewables or for scheduled waste have taken long periods for approval. Why? The client does not have a GLC or GLIC as its shareholder. The sector assumptions are not widely accepted. The size of the facility is too large. The risk unit of a bank is not ‘comfortable’ with the project profile. And so forth. 

Building my own business (financial advisory) from the ground up with no external fundraising, I can say that the banking system in Malaysia does not foster entrepreneurial endeavours. In fact, it is a major hurdle to MSMEs as the bank establishments are too entrenched following the post 1997 Asian financial crisis consolidation exercise. 

The banks prefer only to lend to highly profitable businesses that may not need it and deprive those who have genuine financing needs. They back winners or those who they think are winners. This is why regardless of whether it is an economic crisis such as Covid-19, the banks all remain highly profitable so much so they can afford to pay windfall dividends to shareholders and higher taxes to the government during the period. 

Some may argue that, with the government rolling out many programmes today, the situation must be different. While larger allocations may increase banks’ capacity to disburse loans, the more important question is who ultimately receives the financing. Many have been approached by relationship managers and bankers to take up special SME loan facilities with low interest rates, even though they do not need additional financing. This includes owners of listed companies and large private corporations. In many cases, financing is channelled through associated companies or subsidiaries of privately held groups. Even where traditional collateral may be lacking, banks are often willing to accept corporate guarantees from financially strong parent entities. What this effectively means is that banks hardly lose. They only finance profitable companies with little to no risk of default. In addition, many facilities remain collateral-backed and may require borrowers to purchase key-person insurance from related insurance providers at exorbitant premiums. As a result, banks can generate income not only from lending activities but also from associated financial products. 

If we truly want to foster entrepreneurship and help the MSMEs evolve into high-quality public-listed companies, this is not the way. There is a pressing need to have a larger pool of dedicated funds that invest directly in MSMEs. Beyond lending, these funds should provide equity financing and growth capital to promising businesses with the potential to scale. And use licensed corporate finance advisors (CFAs) to steer MSME on a pathway to success. Banks only look after their own balance sheet! If only they use CFAs with BNM’s approval to assist in the growth trajectory of MSMEs then we may have a dynamic landscape and more employment opportunities for fresh graduates. 

Reference:

Are banks truly helping MSMEs?, Ng Zhu Hann, The Star, 13 June 2026

 

Has Asia’s Factory Output Expanded?

 

Asia's factory activity expanded steadily in May on stockpiling by some companies to get ahead of supply shocks from the Middle East conflict. Surveys done showed that the war in the Middle East was straining global energy supplies and hitting vulnerable economies hardest.

Factory activity expanded in most Asian economies. China's private sector gauge grew for a sixth straight month and South Korea's hit the fastest pace in five years, highlighting a region-wide push to build buffers against potential conflict-led disruptions. 

Japan's factory activity also expanded with the PMI at 54.5 in May, slowing from April's more than four-year high of 55.1, though firms there reported the sharpest rise in input costs since September 2022 due to higher raw material prices driven by the Middle East war.

 

Source: https://en.wikipedia.org 

South Korea's PMI rose to its highest since March 2021 at 54.8 in May, up from 53.6 in April, again underlining firms' drive to lock in supplies as shipping disruptions tied to the Iran war jolt global trade. 

The U.S.-Israeli war on Iran, which began late in February, has upended trade, rattled financial markets and raised concerns over global energy supplies, particularly through the Strait of Hormuz, a key route for oil and gas shipments. 

In Vietnam, the factory PMI gauge rose to 52.8 from 50.5 in April, while that for Taiwan rose to 56.1 from 55.3, the surveys showed. The index for the Philippines also rose to 50.8 from 48.3 in April. 

The uncertainties in the world cause many to stock-up but this itself is a cost which will be borne by the consumer eventually. The sooner there is peace, we have a more sane world. But, alas, America is bent on war and tariffs which is just self-destruction! On its 250^th anniversary (of independence), there is little cause to celebrate with a president who only sees everything in transactional terms and focused on him. 

Reference:

Asia's factory output expands as firms stockpile buffers over Iran war risks, The Star,

1 Jun 2026

 

 

Strategic Thinking Models for Leaders

 Most leaders don’t fail because they lack effort. They fail because they lack clear thinking frameworks.

Here are 10 strategic thinking models every leader should have in their toolkit: 

1. SWOT Analysis → Know your strengths & blind spots

2. Porter’s Five Forces → Understand your competitive landscape

3. PESTLE Analysis → Scan the external environment

4. Blue Ocean Strategy → Create, don’t compete

5. BCG Matrix → Allocate resources wisely

6. Scenario Planning → Prepare for uncertainty

7. OODA Loop → Make faster, smarter decisions

8. McKinsey 7S → Align your organization

9. First Principles Thinking → Solve problems from the ground up

10. Ansoff Matrix → Choose the right growth path

The real advantage? Not knowing these models—but knowing when to use each one. Great leaders don’t guess. They think in systems.

  

 Reference:

10 Strategic Thinking Models for Leaders, Des H Rikhotso on Linkedin

Job Losses and Job Creation!

 

It was recently reported that 7,057 workers lost their jobs in April, up from 5,855 in March, though still below January’s 10,658. In its latest report, the Social Security Organisation said manufacturing remains the hardest-hit sector, accounting for more than a quarter of total job losses in April, followed by wholesale and retail trade as well as vehicle repair services.

 

 

In the above chart, critical talent shortages are mentioned as well as sectors actively recruiting. AI and semiconductors are creating demand. Digital capabilities are increasingly sought even outside traditional technology jobs. The market is moving toward tech-enabled roles, not only pure tech jobs. Workers in areas such as sales, finance, marketing, operations and administration are increasingly expected to use AI tools.

 

Job losses may need more detailed work, especially if it is manufacturing. Is this due to manufacturing plants closing and what skill sets do the workers have? If it is wholesale and retail trade then that’s more reflective of a general dampening in consumer demand. some of these workers could be re-trained but many may be too old or too fixed in their thinking!

 

Reference:

High-tech skills a buffer from cuts, Allison Lai, The Star, 27 May 2026

Is Malaysia’s Public Housing Cheap?

 

DBKL spends RM300 to maintain each public housing flat. It collects RM124 in rent. The maths only works one way. That is the monthly rental rate for a DBKL People's Housing Project flat. RM124. Less than most Malaysians spend on their weekly grocery run. A figure that has not been meaningfully revised in decades. And according to a new report, it is at the very heart of why Malaysia's public housing system is quietly heading toward collapse.

 

A report by Think City titled "From Roof to Resilience", highlighted by Malay Mail, found that stagnant rental rates and mounting rental arrears have rendered public housing in Malaysia financially unsustainable. The math, once you look at it clearly, is not complicated. It is just uncomfortable.

 

Source: https://ms.wikipedia.org

 

The actual cost of managing and maintaining each unit, covering cleaning, utility bills, lift maintenance, and public facilities, is estimated at RM300 per month. Every single month, DBKL loses RM176 per unit just by keeping the lights on and the lifts running. Across tens of thousands of units, that gap compounds into a structural financial problem that no amount of goodwill can paper over. Some of those arrears stretch back years. Some tenants have not paid in six months, a year, or longer.

 

Malaysia's public housing model was built on a philosophy of welfare provision. The government, through DBKL and other authorities, would build and manage affordable housing for the urban poor, charging rents low enough that even the most economically vulnerable could afford them. The social intention was noble and the political logic was clear. But the financial model was never fully thought through. Or if it was, the thinking was always that the government would absorb the shortfall indefinitely.

 

The Edge Malaysia reported as far back as 2024 that DBKL had failed to collect an estimated RM60 million in arrears accumulated over decades, and that the rental rate was insufficient to cover maintenance costs. The then-city hall management acknowledged the problem openly. Nothing materially changed.

 

Successive governments have maintained the low rental rates for political reasons. Raising rents on the urban poor is politically costly in a way that allowing the physical condition of public housing to gradually deteriorate is not. The deterioration happens slowly, spread across thousands of units, invisible in press conferences. A rent increase is immediate and measurable and generates complaints.

 

The result is a system where the average PPR flat now costs more to maintain per month than it earns in rental revenue, the building fabric is ageing without adequate funding for repairs, and hundreds of millions of ringgit in arrears sit uncollected because enforcement is difficult against people who genuinely cannot pay.

 

This brings us to the question at the heart of the whole debate. Who is actually responsible for the condition of public housing? Is it DBKL's responsibility to maintain every unit to a standard proportionate to the rent charged? Is it the resident's responsibility to maintain their own unit even if they are paying almost nothing? Or is the problem that the rent is so low it creates a psychological disconnect between what people pay and what they feel entitled to expect?

 

Most residents of PPR and PA flats are from B40 households. Young people who came to the city looking for work and found that even the cheapest private rental was beyond their reach. Families who have been on the waiting list for years and feel fortunate to have a roof at all. Single mothers, elderly residents on fixed incomes, new workers in their first jobs. These are not people gaming the system. They are people the system was designed to serve.

 

But a system that collects RM124 per unit and spends RM300 per unit to maintain it, while sitting on RM70 million in uncollected arrears in 2025, is not serving anyone well. Not the residents who deserve better maintained homes. Not the taxpayers who ultimately fund the gap. And not the long-term viability of affordable housing as a concept in Malaysian cities.

 

The Think City report's title, "From Roof to Resilience," implies a transformation rather than a patch. And that is exactly what is needed. Rental rates in public housing need to be reviewed and gradually adjusted to reflect at least a portion of the actual maintenance cost. Not in a single jump that shocks residents, but in a carefully phased increase accompanied by genuine improvements in maintenance standards. If rents go up even modestly and the lifts start working consistently, the bins get emptied on time, and the hallways are properly lit, most residents will accept the trade-off.

 

Reference:

Malaysia's Public Housing is Cheap. That is Exactly Why it is Falling Apart.

Opinion, Kamarul Azwan, Newswav, 30 May 2026

 

KL Low-Cost Housing Rent Arrears Reach RM70m, says Mayor, The Star, 18 May 2025

What is the Thucydides Trap?

 

The Thucydides Trap is a political theory stating that when an emerging power threatens to displace an established ruling power, the resulting structural stress makes armed conflict between them highly probable.  This was what Xi Xin Ping told Donald Trump in Beijing recently. 

The concept is based on a famous observation by the ancient Greek historian Thucydides regarding the Peloponnesian War. He noted: "It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable." 

The term was popularised by Harvard political scientist Graham Allison to analyse great power dynamics.

 

https://en.wikipedia.org/wiki/Thucydides_Trap

The Dynamic: The anxiety and paranoia felt by the ruling power (e.g. Sparta) as the rising power (e.g. Athens) gains economic and military strength often leads to strategic miscalculations and a catastrophic conflict. 

Primary Example: It is most frequently used to describe modern U.S. – China relations, where China’s rapid ascent is viewed by many as threatening longstanding American global hegemony. 

While Allison’s historical analysis showed that 12 out of 16 past power transitions ended in war, he and other scholars emphasise that conflict is no inevitable. Both emerging and established powers can consciously manage their rivalry through diplomacy, compromise, and establishing new structural rules to coexist peacefully. 

The importance of recognising it is that markets, economies are all impacted. The current trade issues with the U.S. is part of this political theory. A declining power is flailing about just to remain dominant. Hence, the war on Iran and the Straits of Hormuz. What can we do? Large (or even small) companies may need to work around the games of both superpowers. That is why Tim Cook, Jensen Huang and Elon Musk went to China with Trump. They may have not secured anything of value but paid “homage” to ensure their businesses could survive the near future. For ASEAN, we are closely aligned with China and entertain U.S. investments which has no borders. Malaysia must continue to work on its AI, semiconductors and data centres to ensure growth and provide employment. Are we “future proof” whichever way the Thucydides Trap falls? You can answer that!

 

What is the Right AI Tool for Your Task?

 

When to Use Which AI Tool? AI tools are powerful — but choosing the right tool for the right task is what actually boosts productivity. Here’s a quick breakdown:

ChatGPT Best for: Reasoning, brainstorming, creative writing & problem-solving ✅ Idea generation ✅ Content drafting ✅ Learning & explanations

 

Claude Best for: Long documents & deep analysis ✅ Large file summarization ✅ Detailed reports ✅ Compliance & structured writing

 

Gemini Best for: Google ecosystem & research workflows ✅ Workspace collaboration ✅ Multimodal tasks ✅ Research assistance

 

Perplexity Best for: Real-time information & cited research ✅ Fact-checking ✅ Market research ✅ Up-to-date answers

 

Grok Best for: Trends & social insights ✅ Trend analysis ✅ Social listening ✅ Real-time discussions 

Pro Tip: Don’t rely on one AI tool — build an AI workflow stack based on your task.

 

Reference:

Choosing the Right AI Tool for Your Task, Credit to Rakesh Kumar, this title was summarized by AI from linkedin.com, AI For Leaders