Experian Malaysia: SMEs Show Resilience, But Cash Flow Pressures Persist

Experian Malaysia’s State of Credit 2025 report, based on data from its Malaysia Trade Bureau, examines payment behavior and cash flow trends across seven key sectors: construction, manufacturing, services, hospitality/F&B, transport/logistics, retail, and wholesale. The report highlights that while Malaysia’s economy grew steadily (3.6% in 2023 and 5.1% in 2024), with strong rebounds in construction (14.6% growth in H1 2024) and hospitality/F&B due to tourism, SMEs face persistent liquidity challenges.

Experian Report

Payment delays improved modestly, dropping from 64 to 61 days for all enterprises and from 69 to 64 days for SMEs between 2022 and early 2025, while large corporations saw minimal change (58 days).

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Key Insights and Sector Highlights:

● SMEs continue to trail corporates in payment performance.

● Sectors with the widest payment gap between corporations and SMEs in the latest quarter (1Q 2025) include Transport/Logistics (26 days), Hospitality (13 days), and Wholesale (10 days).

● F&B and Hospitality SMEs face sustained cost pressures and must manage cash flow carefully, even as tourism recovery brings renewed demand.

● Construction shows stronger payment discipline butfaces overheating risks as demand and costs rise.

● Transport and logistics sector payment delays average 76 days for both large corporations (increased by five days) and SMEs (increased by four days), impacted by subsidy reforms, higher fuel costs, and supply chain disruptions.

● Cost inflation and operational pressure top the list of SME concerns, with global trade policy shifts and export-related risks also contributing to uncertainty.