KUSKOP Unveils SCALE Action Plan 2027 to Fix Long-Standing MSME Problems

The Ministry of Entrepreneur and Cooperatives Development (KUSKOP) has set out a new roadmap for micro, small and medium enterprises (MSMEs) next year. Minister Steven Sim announced the SCALE Action Plan for 2027 at the SAMENTA SME CEO Forum 2026 on Thursday evening, 22 October, according to Bernama.

The plan is meant to sit alongside the ministry's existing "ABCD" strategy for 2026, which focused on productivity, cutting bureaucracy, access to capital and market access. Where ABCD deals with immediate business problems, Sim said SCALE targets longer-term structural reforms that help MSMEs grow, compete and move up the value chain.

The five priorities behind SCALE

Each letter of SCALE stands for one priority area:

• S, SME Redefinition: a review of Malaysia's SME definition, which has not changed since 2013, so it reflects today's business landscape and international practice.
• C, Cash Flow Protection: measures against delayed payments and long payment retention periods.
• A, AI for MSMEs: helping small businesses adopt AI at different stages of their operations.
• L, Local Content Requirement: exploring requirements, guidelines and, where needed, legislation so local MSMEs take part more directly in supply chains and big investment projects, including foreign direct investment.
• E, Easing MSME Financing: working with other ministries, banks and Bank Negara Malaysia on outdated rules, and looking at alternative ways to raise capital beyond traditional lenders.

Why late payments made the list

The cash flow item is likely to get the most attention from small business owners. KUSKOP said the aim is to strengthen the financial resilience of MSMEs and stop smaller firms from effectively acting as interest-free lenders to bigger companies when invoices are paid late or money is held back for long periods.

On AI, Sim said the technology could let businesses raise output and productivity without simply working longer hours, which he linked to Malaysia's shift from a "Made in Malaysia" to a "Made by Malaysia" growth model.

"While KUSKOP's ABCD strategy would continue to address immediate business challenges, the SCALE Action Plan would complement the existing strategy by focusing on longer-term structural reforms to help MSMEs grow, compete, and move up the value chain." (Steven Sim, as reported by Bernama)

The money already on the table

In a separate statement, KUSKOP said SME Corp Malaysia puts total MSME-related support under Budget 2027 at RM67.9 billion, covering financing, guarantees, grants, training and programmes. That includes RM57 billion in loan and financing guarantee facilities, up from RM50 billion in 2026. As of 30 September 2026, the ministry had channelled RM10.5 billion to about 295,000 entrepreneurs and MSMEs, against a full-year target of RM15 billion.

What this means for Malaysian readers

SCALE is a plan, not new law yet, so details on the new SME definition, payment protections and local content rules are still to come. Still, it is worth paying attention now. A revised SME definition could change which grants and financing schemes your business qualifies for. If late-paying customers are squeezing your cash flow, keep clean records of invoice dates, agreed payment terms and actual payment dates, because that is the kind of evidence any future rule will rely on. And with Sim urging businesses to use Budget 2027 support, it is a good time to check which financing and AI adoption programmes you can apply for before the year's allocations run out.

Source: Bernama, "Scale Action Plan 2027 To Tackle MSME Structural Challenges - Steven Sim", 22 October 2026. Rewritten in our own words.