The government will focus on helping more micro, small and medium enterprises (MSMEs) scale up, improve productivity and expand their market access after the sector grew faster than Malaysia’s overall economy in 2025.
Minister of Entrepreneur Development and Cooperatives Steven Sim Chee Keong said official data from the Department of Statistics Malaysia (DOSM) showed that GDP generated by MSMEs grew by 5.7% to nearly RM690 billion, surpassing the country’s overall economic growth of 5.2%.
The contribution of MSMEs to Malaysia’s GDP also increased from 39.5% in 2024 to 39.7% in 2025.
Nearly 1.3 Million MSMEs In Malaysia
Malaysia recorded nearly 1.3 million MSMEs in 2025, representing 96% of all businesses in the country. The number increased by almost 20% compared with the previous year.
However, Steven said more than 77% of MSMEs remain microenterprises, while only 1.1% have reached the medium-sized category.
“Our real challenge is not simply to create more businesses, but to ensure Malaysian businesses can scale up. Microenterprises must become small businesses, small businesses must grow into medium-sized companies, and more local companies must be able to enter global markets,” he said.
“This growth must be translated into companies that are more productive, innovative and competitive.”
Steven was speaking during a press conference on Malaysia’s 2025 MSME performance held at SME Corp. Malaysia.
MSME Exports Reach RM214.5 Billion
Despite a challenging global trade environment in 2025, Malaysian MSME exports recorded double-digit growth of 10.5% to RM214.5 billion.
The performance exceeded Malaysia’s overall export growth of 5.9%, as well as the 5.1% growth recorded by non-MSME companies.
According to Steven, the results demonstrated that Malaysian MSMEs have a strong foundation and can adapt to changes in global markets.
“This achievement once again signals to the government that the focus must now be on translating this growth into more productive, larger-scale, innovative and globally competitive companies,” he said.
RM15 Billion To Help MSMEs Scale Up
To accelerate the scaling-up agenda, the Ministry of Entrepreneur Development and Cooperatives (KUSKOP) is implementing the Power Up 10K initiative, supported by RM15 billion in financing.
The initiative aims to help MSMEs improve productivity, strengthen cash flow and increase business capacity. It will also support companies seeking to expand their presence in domestic and international markets.
Power Up 10K is aligned with KUSKOP’s ABCD strategic framework, which focuses on productivity transformation, simplified bureaucracy, improved access to capital and wider market access.
The initiative will support the government’s target of increasing the proportion of medium-sized companies in Malaysia to 5% by 2030.
New Guide Helps MSMEs Benefit From FTAs
During the same event, Steven announced the launch of SME Corp.’s Quick Guide on Utilising FTAs by SMEs.
The guide is designed to help Malaysian MSMEs benefit from the 17 free trade agreements signed by Malaysia.
It provides practical information to help businesses identify suitable agreements, assess market opportunities, understand rules of origin and take advantage of tariff reductions and other trade benefits.
“FTAs are not only for large companies. MSMEs can also benefit from lower tariffs, wider market access and opportunities to participate in international supply chains,” Steven said.
Expanding Access To China And The Green Economy
SME Corp. also exchanged Memorandum of Understanding documents with the Malaysia-China Chamber of Commerce (MCCC) and the Small and Medium Enterprises Association (SAMENTA).
The collaboration with MCCC will focus on expanding MSME access to the Chinese market through market intelligence, trade missions and business-matching programmes. It will also encourage the adoption of digitalisation, artificial intelligence and innovation among Malaysian businesses.
Meanwhile, the partnership with SAMENTA aims to prepare MSMEs for the green economy and the growing demand for sustainable business practices. The collaboration will focus on capability development and the adoption of environmental, social and governance principles.
Source: here
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