Many hawkers and small traders say they remain shut out by licensing hurdles, poor credit histories and financing conditions that they claim are “almost like banks”.
KUALA LUMPUR: Putrajaya has allocated RM5 billion to help more than 400,000 micro-entrepreneurs, but many hawkers and small traders say they remain shut out by licensing hurdles, poor credit histories and financing conditions that they claim are “almost like banks”.
The concerns surfaced after Communications Minister Datuk Fahmi Fadzil said on Wednesday the Cabinet has taken note of a Khazanah Research Institute finding showing only about 5% of hawkers have received assistance from formal financing institutions.
READ MORE: Anwar directs ministries to engage hawkers on financial aid access
While the government is expanding access to microfinancing through agencies such as Tekun Nasional, Majlis Amanah Rakyat (Mara) and Bank Simpanan Nasional, traders said many micro-businesses are unable to meet the requirements needed to qualify for aid.
For some, the obstacle is the lack of licences and permanent business premises.
Others pointed to poor credit scores, unresolved debts and fears of taking on new financial commitments in an uncertain economy.
In Jalan Dungun in Damansara Heights, Che’ Mok Gerai Station operator Meor Hasrulniza Hashim, 52, said many roadside traders were effectively filtered out before they could even prove their businesses were viable.
He said some traders were denied opportunities because of old credit card debts while others struggled with Kuala Lumpur City Hall licensing issues and financing requirements that increasingly mirror commercial banking conditions.
“Usually, the first thing they ask is whether we have a licence. If there is no licence, that becomes a problem.
“For Tekun Nasional, this year it is almost like dealing with banks. They said only those with premises can apply,” the grilling and catering operator said.
Meor added that moving into a shoplot simply to qualify for financing could cost between RM30,000 and RM40,000 upfront, excluding rental, utilities and stock purchases.
He said traders at his site are waiting for City Hall approval as group applications require about 35 names, but the process is frequently delayed due to changes in trader numbers and repeated document submissions.
After years of delays, Meor said he has taken responsibility for maintaining the site and had even offered to manage it properly if City Hall allows it.
“I told the then Federal Territories minister in 2022 when he visited this lot, if the others do not want to follow the rules, let me take over this place and pay. “Whatever City Hall requires, I will try to do it properly. Every day we wash, scrub and clean the place.”
At Kuala Lumpur Central Muhamad Sufi Mat Yusoff, 26, the issue was less about fear of loans and more about whether financing systems understood how micro-businesses actually begin.
Market, Rose Batik owner Rosnani Mohd Nor, 56, described a different reality faced by traders operating within the formal system.
Unlike roadside hawkers, Rosnani said her business is registered, licensed and compliant with income declarations. But even then, she said financing remains a difficult option amid rising operating costs and weaker consumer spending.
She estimated that setting up a proper business premises could cost up to RM100,000 after accounting for rental deposits, fittings and stock. Her rent alone stands at almost RM7,000 a month while sales this year have slowed, especially after Ramadan and Hari Raya.
Rosnani added that financing could help businesses expand but many traders fear becoming trapped in repayment commitments if business conditions worsen.
“It is not that I do not want to apply. It just feels like taking on more debt. Later, there is the commitment to pay every month. The economy is also not good now.”
For young entrepreneur The Slim River-based founder of Cha Galau, which sells matcha and chocolate drinks, said many small traders started with temporary lots and carts long before they could afford permanent premises.
He said renting a trading lot could cost close to RM1,000 a month, while his beverage cart alone costs about RM5,600.
“The government should give more flexibility to these financing requirements.”
The Finance Ministry said on Thursday the RM5 billion microfinancing allocation allows eligible micro-entrepreneurs to apply for loans of up to RM100,000.
The ministry said applications could be made through schemes offered by Tekun Nasional, Bank Simpanan Nasional, Amanah Ikhtiar Malaysia, Mara, Agrobank and Bank Rakyat, with financing rates starting from as low as 3% annually.
