The National Small and Medium Enterprise Development Council
convened its fifth meeting today and endorsed a number of key
initiatives to further strengthen the enabling infrastructure to
support the development of SMEs.
Chaired by the Prime Minister, the Council comprises of Ministers
and Heads of 18 key Ministries and Agencies involved in SME development
and serves as the highest policy making body to chart the direction and
strategies for SME development.
A Comprehensive Microfinance Institutional Framework
The Council has approved the comprehensive microfinance
institutional framework to promote the development of a sustainable
microfinance industry in Malaysia.
The development of a sustainable and commercially-driven
microfinance industry is important to ensure that micro enterprises
have adequate and continuous access to financing. The comprehensive
microfinance institutional framework is important as currently, 80% of
SMEs are micro enterprises.
The Council approved the transformation of Bank Simpanan Nasional
into a specialised microfinance institution. Bank Simpanan Nasional
will be introducing a loan package for micro enterprises, with a
maximum loan amount of RM50,000 for up to 5 years. The loan will be
provided to micro enterprises with viable business activities, at
commercial rates with repayment incentives given to good borrowers.
Credit cooperatives, are another important provider of microfinance
identified and initiatives will be adopted to strengthen the
cooperative movement, including through the establishment of
Suruhanjaya Koperasi Malaysia.
Other institutions that will be offering microfinance are Bank
Kerjasama Rakyat Malaysia Berhad and Bank Pertanian Malaysia. In
particular, Bank Pertanian Malaysia will provide microfinance for
agriculture and agro-based businesses.
Strategies will be undertaken to promote the participation of
banking institutions and specialised financial institutions in the
microfinance industry. In this regard, in addition to the flexibility
accorded to establish up to four new branches, consideration will be
given to locally-incorporated foreign banks to have greater presence in
the non-urban areas to conduct microfinance activities. In liberalising
the banking system, emphasis would be towards attracting players who
are recognised as specialist in a specific segment, including
microfinance.
Bank Negara Malaysia will facilitate the development of a
"Graduation Programme" to enable micro enterprises to obtain the right
amount and type of financing to meet their needs as their business
grow. Through this structured programme, micro enterprises that require
larger funds to finance its business growth will be assisted in
obtaining such financing from the providers of microfinance as well as
from the SME Bank and commercial banks.
The development of a sustainable and commercially-driven
microfinance industry will complement the existing Government-sponsored
microfinance programmes undertaken by institutions such as Amanah
Ikhtiar Malaysia and TEKUN.
Formation of SME Marketing Committee to Drive Global Marketing of SME Products
The Council approved a set of proposals to enhance the marketing
infrastructure to support greater global market penetration of SME
products and services through coordinated Government assistance
programmes in the area of marketing. To achieve this, a two-pronged
approach will be undertaken, namely:
- the formation of an SME Marketing Committee, an
inter-Ministry committee to be chaired by the Ministry of International
Trade and Industry, in collaboration with the respective Ministries and
Agencies to develop a comprehensive marketing strategy and
implementation approach to effectively and efficiently market our SMEs'
products and services overseas; and - MATRADE to coordinate the implementation of international marketing programmes and activities.
This approach will enhance the synchronisation of Government
initiatives in planning and implementing overseas marketing strategies
while optimising the utilisation of resources and expertise. It will
facilitate the development of export-ready SMEs and assisting them to
market their products internationally more effectively and efficiently.
The move to enhance the marketing support programmes is timely as
SMEs have indicated that marketing is an area where they seek support
from the Government. With a more effective mechanism in place, the
Government hopes that the SMEs' contribution to total exports would
increase, from the current estimate of about 16.6% of total exports.
Launch of Inaugural SME Annual Report 2005
The SME Annual Report is an important initiative adopted by the
Council to enhance the dissemination of information on SMEs in
Malaysia. The SME Annual Report 2005 launched today, provides a review
on the status and performance of SMEs, as well as the achievements of
major programmes undertaken by the Government for the year in promoting
the development of SMEs.
Secretariat
National SME Development Council
7 August 2006
