Guan Eng: Banks should do CSR with one-year interest pause for MSMEs’ existing loans; interest-free RM50k new loans

KUALA LUMPUR, June 3 — Malaysia’s banking industry should “step up and do its Corporate Social Responsibility” (CSR) by urgently helping out local micro, small and medium enterprises (MSMEs) with loan relief measures, DAP’s Bagan MP Lim Guan Eng said today.

Noting that banks’ before-tax profits grew from RM48.3 billion in 2024 to RM54.8 billion in 2025, Lim said the banks’ 13.5 per cent or RM6.5 billion growth in before-tax profits could help “offset” the expected contraction in growth for Malaysia’s manufacturing industry.

He said the continuing Middle East conflict has increased costs for fuel and raw materials, and that many expect this to cause both economic conditions and expected manufacturing activity to further decline.

Lim said the government must urgently use fiscal and monetary measures to help Malaysia’s 1.1 million MSMEs reduce costs and generate businesses, to counter the negative effects of an expected economic slowdown.

“One urgent financial measure is to require the banking industry to impose a one-year interest rate moratorium on existing loans for MSMEs and offer an interest-free loan for the first RM50,000.

“The banking industry can afford to do so. Which industry or business sector can record a profit before tax growth of 13.5 per cent in 2025?” he said in a statement today.

“The prime minister should stop protecting banks but persuade them to do the right thing not only for MSMEs but on behalf of the economic health of the nation,” he added.

This is not the first time that Lim has made this proposal.

In the past few months since the Middle East conflict began, Lim has repeatedly urged the government to step in and help MSMEs, including with proposed interest-free new loans for the first RM50,000 for these companies and one-year moratorium on interest rate for existing loans.