Lim Guan Eng proposed that RM100 million in loans for Chinese-owned MSMEs and RM50 million for Indian-owned MSMEs be channelled through Bank Simpanan Nasional (BSN) instead of SME Bank or Bank Rakyat. He cited Shariah compliance restrictions in those institutions that disadvantage non-Muslim businesses, especially in sectors like food, traditional medicine, and entertainment [1, 2].
Chinese and Indian MSMEs face financing blocks because SME Bank, Bank Rakyat, and Tekun Nasional require business activities to be Shariah-compliant. Lim highlighted that the RM50 million Skim Pembangunan Usahawan Masyarakat India (SPUMI) under Tekun Nasional also enforces such requirements [1]. He said, "Those who claim that such loans show that the financing needs of businesses from all communities are treated fairly are both dishonest and discriminatory when the loans specifically for Indians and Chinese are subject to restrictions" [2].
BSN offers both Islamic and conventional banking products without imposing Shariah restrictions. It has a larger network of 387 branches, compared to SME Bank's 17 and Bank Rakyat's 148, improving access especially in Sabah and Sarawak [1]. Meanwhile, Tekun Nasional’s RM1 billion loan facility for Malay businesses complies with Shariah requirements without issue [2].
Lim urged banks to carry out corporate social responsibility by imposing a one-year interest rate moratorium on existing MSME loans and offering new interest-free loans up to RM50,000 to help MSMEs cope with rising costs and the fallout from the Middle East conflict [3, 4]. "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," he said [3].
Malaysia’s banking sector showed strong profits, with before-tax earnings growing 13.5% from RM48.3 billion in 2024 to RM54.8 billion in 2025. Lim pointed to this growth as evidence of the industry’s capacity to support MSMEs. "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 asked [3].
The ongoing conflict in the Middle East has increased fuel and raw material costs, impacting Malaysia’s manufacturing sector and broader economic growth. The May 2026 S&P Global Malaysia Manufacturing PMI dropped to 49.9, indicating contraction in manufacturing activity after standing at 51.6 in April. Lim noted, "Many sides expect both economic conditions and the Manufacturers PMI to either further decline or linger in the growth contraction territory caused by the continuing Middle East conflict that spiked the cost of both fuel and raw materials" [4].
Lim's latest call on June 3 urges immediate financial relief measures from banks following his proposal on June 2 to route RM150 million MSME loans through BSN to counter Shariah-compliance barriers [1, 3].
