<\/p>\n
The SME Annual Reports 2005 highlights the following:<\/strong><\/font><\/p>\n A. The Macro Perspective<\/strong><\/font><\/p>\n National Agenda for SME Development<\/em><\/strong><\/font><\/p>\n A strong and dynamic SME sector would stimulate the economy and Broadly, strategies to promote the development of SMEs have been To further enhance the Government's role, and for greater Status and Performance of SMEs<\/em><\/strong><\/font><\/p>\n A nationwide Census on Establishment and Enterprises was conducted <\/font><\/p>\n<\/li>\n <\/font><\/p>\n<\/li>\n The Census results confirmed that SMEs are a major source of In terms of contribution to the economy, SMEs generated RM154 Only 2,747 businesses invested in R&D, of which 2,355 are SMEs. The Census also revealed that 84% of the SMEs relied on their own or B. Key Initiatives Promoting SME Development<\/strong><\/font><\/p>\n The Government, through various Ministries and Agencies, has Strengthening of Infrastructure for SME Development<\/em><\/strong><\/font><\/p>\n One of the strategic priorities of the Government is to develop and Initiatives in this aspect encompass developing and enhancing The establishment of on-line portals and business directories such <\/font><\/p>\n<\/li>\n A major development was the establishment of the National Institute Enhancing Capacity and Capability of SMEs<\/em><\/strong><\/font><\/p>\n Enhancing the capacity and capability of the SMEs, forms the second Marketing and Promotion<\/u><\/strong><\/font><\/p>\n The Government provides both financial and non-financial support to To assist SMEs to expand their market, several programmes are in An important area is to assist SMEs in branding and packaging of Training and Human Resource Development<\/u><\/strong><\/font><\/p>\n An important initiative to assist SMEs to train their workers and Advisory Services<\/u><\/strong><\/font><\/p>\n Government agencies provide a wide range of advisory services to Bank Negara Malaysia offers a comprehensive financial advisory SMIDEC offers advisory services to SMEs, including through the SME The Ministry of Science, Technology and Innovations (MOSTI) provides Entrepreneur Development<\/u><\/strong><\/font><\/p>\n Government supports for entrepreneurship development takes the form Key programmes to develop entrepreneurs include the Vendor There are also several programmes to develop entrepreneurs in ICT, Technology Development<\/u><\/strong><\/font><\/p>\n To facilitate and assist SMEs to improve their operations, the To facilitate SMEs to upgrade their technological capabilities, the Product Development<\/u><\/strong><\/font><\/p>\n A number of programmes is in place to encourage SMEs to engage in In response to the growing opportunities available for Halal Awareness and Outreach<\/u><\/strong><\/font><\/p>\n Multiple channels are used to disseminate information and raise the level of awareness and outreach of Government programmes.<\/font><\/p>\n Major exhibitions include:<\/font><\/p>\n Information portals include:<\/font><\/p>\n Recoginition programmes include:<\/font><\/p>\n SMEs Access to Financing<\/em><\/strong><\/font><\/p>\n A well-developed financial infrastructure that is able to meet the Lending Performance to SMEs<\/u><\/strong><\/font><\/p>\n SMEs can obtain financing from various types of financial The main provider of funds for SMEs is the banking institutions. The The DFIs that provide financing to SMEs include the SME Bank, EXIM As at end-2005, there wre 81 Government funds\/financing schemes for Major Initiatives to Enhance SMEs' Access to Financing<\/u><\/strong><\/font><\/p>\n The major initiatives include:<\/font><\/p>\n
\ncontribute to achievement of a wide range of economic development
\nobjectives. In recognition of SMEs' substantial contribution to the
\neconomy, the strategies and initiatives to promote SME development
\nfeature prominently in all of the Government's economic development
\nplans over the years. Over the recent decade, a clear policv for
\naccelerating the development of SMEs has been charted through specific
\nstrategies outlined in the Second Industrial Master Plan, Third Outline
\nPerspective Plan and Eight Malaysia Plan.<\/font><\/p>\n
\nformulated against the backdrop of a changing and challenging economic
\nenvironment. Emphasis was placed on enhancing capacities and
\ncapabilities of SMEs, and enhancing their access to financing. High on
\nthe agenda is to strengthen their competitiveness, mainly through
\ngreater use of technology and upgrading the skills and knowledge of the
\nworkforce.<\/font><\/p>\n
\ncoordination and focus in SME development, the National SME Development
\nCouncil was established in June 2004. The formation of the Council,
\nwhich is chaired by the Prime Minister, represents the Government's
\nhighest commitment in promoting the development of SMEs. The Council
\nprovides the direction for the Government policies to ensure that
\nsufficient support programmes are in place, and are effectively
\ncoordinated and implemented to assist SMEs. <\/font><\/p>\n
\nin 2005 on business enterprises in the agriculture, manufacturing and
\nservices sectors. A preliminary assessment based on the 523,132
\nbusiness establishments that responded to the Census indicated that
\n99.2% or 518,996 of the business establishments are SMEs, of which
\n411,849 are micro enterprises. <\/font><\/p>\n\n
\nmainly engaged in the retail, restaurant, wholesale, transportation and
\ncommunication, and professional services businesses. <\/p>\n
\ntextile and apparel, metal and mineral products, and food and beverages
\nindustries. <\/p>\n
\nmostly in food crops, market produce and horticulture, and livestock.<\/font><\/li>\n<\/ul>\n<\/div>\n
\nemployment, providing jobs for over 3 million workers or 65.1% of total
\nemployment in these business establishments.<\/font><\/p>\n\n
\nwhile 740,000 and 131,000 workers were employed in the manufacturing
\nand agriculture sectors respectively.<\/font><\/li>\n<\/ul>\n<\/div>\n
\nbillion or 47.3% of value added and RM405 billion or 43.5% of output in
\n2003. The Census also showed that 4,257 SMEs exported their goods and
\nservices totaling RM38 billion in 2003. Productivity levels of SMEs are
\nfound to be significantly lower than large enterprises, recording
\nvalue-added per establishment of RM0.3 million compared with RM41
\nmillion for large enterprises. <\/font><\/p>\n
\nSMEs invested RM2 billion in R&D out of the RM4.3 billion spent in
\ntotal by establishments in the Census. Less than 10% of SMEs engaged in
\nmarketing and promotion activities.<\/font><\/p>\n
\ninternally generated funds and funds sourced from friends and family
\nmembers, while 16% sourced their funding from financial institutions.
\nIn contrast, 50% of large enterprises relied on the financial
\ninstitutions. Of the 523,132 establishments, 54,011 SMEs indicated
\nhaving difficulty obtaining financing from the financial institutions,
\nmainly due to lack of collateral.<\/font><\/p>\n
\nundertaken a lot of initiatives and programmes to support the
\ndevelopment of SMEs. The aim is to promote the development of
\ncompetitive and resilient SMEs towards increasing their contributions
\nto the economy. Towards this end, a holistic and comprehensive approach
\nis being undertaken, encompassing three broad strategic thrusts,
\nnamely, strengthening enabling infrastructure; building the capacity
\nand capability of SMEs; and enhancing access to financing.<\/font><\/p>\n
\nstrengthen infrastructure that is required to create an enabling
\nenvironment to support the growth of SMEs and entrepreneurs.<\/font><\/p>\n
\nphysical infrastructure and information management, as well as ensuring
\nregulations and operating requirements are conducive to SME
\ndevelopment. A significant milestone in strengthening the
\ninfrastructure is the introduction of the common definitions for SMEs
\nin 2005 by the National SME Development Council. The common definitions
\nwill facilitate the collection and compilation of SME data for
\nassessment and policy formulation. The Council also initiated the
\nestablishment of the National SME Database to address the information
\nneeds of the industry and policy makers. To enhance policy formulation
\nand monitoring, the Council endorsed the adoption of the SME Policy
\nFormulation and Evaluation Framework. <\/font><\/p>\n
\nas the SMEinfo portal, FAMAXchange, Agribazaar and HRD Portal (a
\ntraining portal), is an important initiative to facilitate and increase
\nthe outreach of information dissemination.<\/font><\/p>\n\n
\nwas launched in January 2006 to provide a one-stop information resource
\nfor SMEs. Among the information provided in the Portal is detailed
\ninformation on all Government programmes, sources of financing and
\nadvisory services. The Portal also contains an online SME Business
\nDirectory, providing a platform for SMEs to advertise their company and
\nproducts.<\/p>\n
\nis an internet system for farmers, producers, retailers and exporters
\nto interact and conduct their trading on-line. It provides business
\ninformation, including data on new supply, supply feedback, price
\nquotations, logistic services, inventory management, market projections
\nand payment management. Therefore, SMEs using AgriBazaar will be able
\nto discover the best prices for their products, gain greater access to
\nthe market, and thus, expand their business. <\/font><\/li>\n<\/ul>\n<\/div>\n
\nfor Entrepreneurship or ISKEN in January 2005 to create and develop
\nworld-class entrepreneurs. Envisioned as more than a mere training
\ninstitute, ISKEN will, in addition to conducting relevant business
\ntraining courses, actively provide market data and research to support
\nentrepreneurs, and provide consultancy services. <\/font><\/p>\n
\nstrategic thrust for SME development, in strengthening the
\ncompetitiveness and resilience of the SMEs. In order to help SMEs build
\ncapacity and capability, the Government's assistance and programmes
\nfocus on seven broad areas, namely, marketing and promotion; training
\nand human resource development; advisory services; entrepreneur
\ndevelopment; technology development; product development; and awareness
\nand outreach. <\/font><\/p>\n
\nenhance SMEs' marketing and promotion capability, with assistance
\nextending to cover areas like direct promotional activities, brand and
\nfranchise development, as well as linkages with large companies. <\/font><\/p>\n
\nplace, including the Market Development Grant (a matching grant scheme
\nto cover expenses in promoting SMEs' products oversees), Industrial
\nLinkage Programme (a programme to link SMEs with large companies and
\nmultinationals) and Local Market Expansion Programme (to link
\nBumiputera ICT companies with GLCs). <\/font><\/p>\n
\ntheir products. Key programmes include "Grant for Enhancing Product
\nPackaging, Design and Labelling Capabilities of SMEs", Brand Promotion
\nGrant and Malaysia's Best brand for agriculture products.<\/font><\/p>\n
\nundertake skills upgrading is the appointment of the Human Resource
\nDevelopment Berhad (PSMB) to coordinate and oversee training and human
\nresource development for SMEs. PSMB also manages the Human Resource
\nDevelopment Fund, and offers several schemes specifically to encourage
\nSMEs to train their workers. PSMB has also established an HRD Portal
\n(www.hrdportal.com.my), an on-line training resource centre for
\nemployers, employees and training providers.<\/font><\/p>\n
\nSMEs, generally in the areas of business and financial management, and
\ntechnical advisory.<\/font><\/p>\n
\nservices to SMEs, through the "Laman Informasi, Nasihat dan Khidmat"
\n(LINK) as well as a dedicated unit to handle SMEs queries and
\ncomplaints. In addition, the Bank also assists SMEs to restructure
\ntheir non-performing loans through the Small Debt Resolution Scheme. <\/font><\/p>\n
\nExperts Advisory Panel, aimed at providing technical assistance to SMEs
\nto improve their efficiency, productivity and technological
\ncapabilities.<\/font><\/p>\n
\ntechnical advisory services pertaining to standards and certification,
\nin view of helping SMEs to meet international standards. <\/font><\/p>\n
\nof programmes designed to provide an infrastructure to make it easier
\nfor entrepreneurs to enter business, inculcate the entrepreneur spirit
\nand educate potential entrepreneurs.<\/font><\/p>\n
\nDevelopment Programme, Franchise Development Programme and Groom Big
\nProgramme. <\/font><\/p>\n
\nsuch as the Start-up Development Programme, Bumiputera ICT Entrepreneur
\nDevelopment Programme and National Incubation Development Programme. <\/font><\/p>\n
\nGovernment provides both financial and non-financial support programmes
\nto encourage SMEs to adopt better technology as well as overall process
\nimprovements through the use of specific methods for efficient systems
\nand business processes.<\/font><\/p>\n
\nMinistry of International Trade and Industry (MITI) provides "Grant for
\nProduct and Process Improvement" and "Soft Loan for ICT Adoption". In
\naddition, the Malaysian Technology Development Corporation (MTDC)
\nadministers the Technology Acquisition Fund.<\/font><\/p>\n
\nresearch and development activities in order to improve the quality of
\ntheir products. These programmes include the Enhancement Programme by
\nSMIDEC, Industry Research and Development Grant Scheme (administered by
\nMOSTI), and Commercialisation of R&D Fund (by MTDC). <\/font><\/p>\n
\nproducts, the Government introduced the Grant for Development and
\nPromotion of Halal Products in 2005. This Grant, administered by
\nSMIDEC, provides assistance to local companies in preparing, developing
\nor improving Halal products, as well as in acquiring related
\ncertification and quality standards.<\/font><\/p>\n\n
\n
\n
\ndiverse financing needs of SMEs is essential to support the
\ncompetitiveness and continuous growth of SMEs.<\/font><\/p>\n
\ninstitutions, including banking institutions, development financial
\ninstitutions, leasing and factoring companies, as well as venture
\ncapital companies. To complement the financial institutions, the
\nGovernment has also established special funds for SMEs.<\/font><\/p>\n
\ntotal outstanding SME loans expanded at an annual rate of 6.5% since
\n2001, to reach RM96 billion or 42.6% of outstanding business loans at
\nend-2005. Between 2002 – 2005, banking institutions approved an
\naveraged of RM31.2 billion of financing annually to SMEs, whilst
\ndisbursements averaged at RM86.9 billion annually. In 2005, the banking
\nsystem approved RM35.8 billion of financing to more than 85,000 SME
\naccounts, whilst RM110.7 billion was disbursed to SMEs. In the first
\nfive months of 2006, the banking system approved RM13.5 billion of
\nfinancing to about 30,000 SME accounts, whilst RM 48.2 billion was
\ndisbursed. The total outstanding SME loans grew by 12.4% to RM101.7
\nbillion at end-May 2006.<\/font><\/p>\n
\nBank, MIDF, Bank Pertanian and Bank Pembangunan for high-technology and
\nICT companies. In 2005, the DFIs approved RM2.3 billion of financing to
\nmore than 5,000 SME accounts. In the first five months of 2006, the
\nDFIs approved RM2.3 billion of financing to about 2,300 SME accounts. <\/font><\/p>\n
\nSMEs with a total allocation of RM12.7 billion. Of these 81 funds, 49
\nwere in the form of soft loans, while the remaining were in the forms
\nof grants (20) and equity financing and venture capital funds (12). In
\naddition, Bank Negara Malaysia has five special funds for SMEs with a
\ntotal allocation of RM11.4 billion.<\/font><\/p>\n\n