16/12/2025

BIZ & FINANCE TUESDAY | DEC 16, 2025

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‘M’sian climate-focused MSMEs struggling to get financing’

Ű BY JOHN GILBERT sunbiz@thesundaily.com

o Segment still encountering significant barriers to accessing adequate funds despite strong growth potential, says UNDP analyst

KUALA LUMPUR: Micro, small, and medium-sized enterprises worldwide are facing a climate financing gap of US$5.7 trillion (RM23.3 trillion), and even though they account for more than 90% of all businesses and over half of global employment, they receive only a relatively small share of formal financing. East Asia and the Pacific alone account for about 46% of this global SME financing shortfall, under scoring the scale of unmet demand in this region. United Nations Development Pro gramme (UNDP) Malaysia, Singa pore and Brunei SDG impact finance analyst Ong Pei Ying said Malaysia reflects this broader predicament, with around 1.2 million MSMEs accounting for about 97% of all businesses in the country still encountering significant barriers to accessing adequate financing. She said while Malaysia’s climate enterprise landscape is increasingly anchored in MSMEs, this segment has historically received limited global attention despite being a “key component” of economic activity. Ong said there are about 1.2 million MSMEs formally incor porated in Malaysia, most of them relatively young businesses operating for between two and four years and predominantly structured as for profit, domestically focused enter prises, with only around 40% active in export markets. “Survey findings show that these climate-focused MSMEs are generally small in scale – over half are micro enterprises with annual revenues clustered between roughly RM100,000 and RM300,000 – but

criteria (18%).” She said this represents a market failure, not a business failure: even among viable SMEs seeking RM500,000 to RM3 million, 45% continue to encounter these barriers despite having clear track records. As a result, 68% of climate SMEs experience moderate to high diffi culty in raising capital in a sector critical to Malaysia’s net-zero transition. In summary, Ong said, nearly 60% of surveyed climate MSMEs in Malaysia require growth funding ranging from RM100,000 to RM3 million. The highest concentration of funding needs falls between RM500,000 and RM1 million, fol lowed closely by RM1 million to RM3 million. Fewer enterprises report funding needs below RM100,000 or above RM5 million. Most funders surveyed typically operate within funding ranges of RM2 million to RM5 million, creating a mismatch with MSME demand. On average, surveyed climate MSMEs require approximately RM2.1 million in funding, Ong said. Moving on, she said, Malaysia is strategically positioned to bridge its climate financing gap by focusing on preserving natural offsets and pursuing ambitious mitigation efforts outlined in key policy frameworks. Furthermore, the country’s posi tive and committed pathway for mobilising climate finance is an

display encouraging performance, with 57% reporting revenue growth and many recording substantial gains in the range of 6% to 30% or more. “It is quite good to be in the climate business,” she told delegates at the Mobilising Climate Finance for Malaysia’s Sustainable Future event yesterday. The profile that emerges is of a sector concentrated in Selangor and Kuala Lumpur, primarily serving domestic demand, with the highest levels of activity and response in renewable energy and environmental solutions, and around 73% to 75% clearly identifying as profit-driven businesses. Despite that, Ong said, over one third of climate-focused SMEs report that access to funding is severely constrained, mainly due to systemic supply-side failures rather than weaknesses in business viability. “Funding is simply not flowing: 35% of respondents rate funding availability at two or below, and among these, 60% require more than RM500,000 in capital. “Supply-side constraints domi nate the picture, with 72% high lighting issues such as a lack of available funding (39%) and limited investor interest (33%), rather than deficiencies in their own business models. “Inefficient funding processes compound these challenges, as 40% of SMEs face lengthy approval timelines (22%) or overly stringent and growth. After our shareholder asked a lot of questions, all this is what we answer to the shareholder today,” he told reporters after its 41st AGM yesterday. Lee stressed that the company was not alleging wrongdoing but that any investigation should be conducted strictly in accordance with the law. “We hope that Andrew Heng (group managing partner of Baker Tilly Malaysia) and Mr Kumar (of Baker Tilly) will legally follow the legal process, as they have said they would, and engage with Country Heights as a public company in accordance with the law,” he said. Lee claimed that some proof-of-debt (POD) claims filed by creditors seeking payment in the Mines Waterfront liquidation were questionable. Baker Tilly had indicated that there were multiple PODs involved in the liquidation, but Lee said that Country Heights had already settled

Ong says climate enterprise has historically received limited global attention despite being a key component of economic activity.

chored in the recognition that upfront investment will significantly reduce long-term economic losses under business-as-usual climate scenarios. Ong said central to this pathway is the prioritisation of nature-based and adaptation financing, reflecting the critical role of forests and other natural assets in enabling Malaysia to reach carbon neutrality while safe-guarding communities and eco-systems. “This direction is supported by a progressively more enabling policy and regulatory environment that seeks to align climate objectives with economic resilience and investor confidence. “Within this context, there is a growing emphasis on meaningful private sector participation in climate

solutions, with policy signals and market frameworks designed to overcome existing inertia and crowd in private capital at scale.” Ong said Malaysia’s Nationally Determined Contribution reported to the United Nations Framework Convention on Climate Change in 2019 reveals total greenhouse gas emissions of approximately 330 million tonnes, with natural sinks – primarily the country’s forests – offsetting two-thirds, or 215 million tonnes, leaving a net 115 million tonnes to address. “Maintaining current forest cover at 54% (with a minimum threshold of 52%) will preserve these offsets, while NDC 2.0 initiatives focus on reducing the remaining emissions,” she added.

Country Heights to lodge police, MACC reports over Mines Waterfront Business Park liquidation

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

SERI Country Heights Holdings Bhd will lodge reports with the police and the Malaysian Anti-Corruption Com mission (MACC) over the liquidation of Mines Waterfront Business Park, which is under Baker Tilly Insolvency PLT’s administration, said founder Tan Sri Lee Kim Yew. He said the matter was raised by shareholders during the annual general meeting and was ad dressed by the board. “This legal process is not about optics or emotion, it is about outcomes. All legal, arbitration and recovery actions outlined are deliberate and forward-looking, aimed at resolving legacy matters, unlocking asset value, and positioning the group on a stronger footing for sustainable recovery KEMBANGAN:

Lee (centre) speaking at a press conference after Country Heights’ AGM.

Baker Tilly’s international head quarters and described his actions as whistleblowing. Country Heights will update the media once the police and MACC reports are filed, he added.

proper legal basis. “Under the relevant provisions, a party cannot simply file a POD if the company does not owe the money,” he said. Lee said he had also written to

all its liabilities, including payments relating to some of the disputed claims. Lee added that provisions under the law, including Section 402, require PODs to be supported by a