SME Development Programmes Under New Economic Model and 10MP
Transcript of SME Development Programmes Under New Economic Model and 10MP
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SME DEVELOPMENTPROGRAMMES UNDER NEW
ECONOMIC MODELAND 10TH MALAYSIA PLAN
by
Czarif Chai Abdullah
ManagerSME Corp. Malaysia
25 February 2011
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SMEs in Malaysia
Targeted Approach in SMEDevelopment
SMEs in NEM and RMK10
Initiative for 2011
Way Forward
Contents
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• SMEs account for a large proportion of businesses in Malaysia:
- 99.2% of establishments (548,267)
- Majority are micro enterprises, with 5 workers and less
SMEs are the backbone of theeconomy
3Source: Census of Establishments & Enterprises 2005
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Services
(86.6 %)
Agriculture
(6.2 %)
Manufacturing
(7.2 %)
Source: Census of Establishments & Enterprises 2005
Wholesale & Retail (55.5%)
Restaurant & Hotel
(15.2%)
Transport &
Communication (6.5%)
Plantation and horticulture
(65.6%)
Fishery and its services
activities (20.8%)
Poultry farming (7%)Textiles & Apparels
(23.4%)
Food & Beverages (15%)
Metal & metal products
(13%)
• Services: 87% share, largest subsector is distributive trade• Manufacturing: 7% share, mainly in textiles/apparels and F&B industries• Agriculture: 6% share, plantation/horticulture and fishing
Currently, SMEs are mainly in the servicessector
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Performance of SMEs outpaced the overalleconomy
SME growth outperformed overall economy for the period 2005 – 2009 mainly
due to supporting policy initiatives such as:• Establishment of NSDC in 2004; and• Other supportive policies (PEMUDAH, Visit Malaysia Year, Government
salary increment, RMK9 projects)
SME Contribution to:
GDP 31.2%
Employment 56.4%
Exports 19%
GDP Annual Growth (2000 price)
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Going forward, SMEs are important endogenoussource of growth towards building a high incomenation
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Promoting balanced SME development
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New Economic
Model:
Creation of a
high-income
nation
Creating national
champions that
become
regional /
international
players
R e d u c t i o n
i n i n c o m e
d i s p a r i t y t h
r o u g h s u p p
o r t
f o r m i c r o e n
t e r p r i s e
Q u a n t u m l e a p i n G D P v i a i n n o v a t i o n & p r o d u c t i v i t y - l e d g r o w t h
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SME policies to be aligned to the NEM
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SRI1: Re-energising the
private sector
• Promote SME growth in innovative & technologically
advanced areas
• Facilitate timely access to funding• More support & assistance for micro enterprises• Creating regional champions• Creating ecosystem for entrepreneurship &
innovation
SRI2: Developing a
quality workforce &reducing dependency
on foreign labour
• Upgrading of skills through education & training
• Reduce dependency on foreign labour through levysystem
SRI3: Creating a
competitive domestic
economy
• Building entrepreneurship through initiatives to
support micro enterprises & start-ups• Remove market distortions through removal of price
controls & subsidies
• Social safety net for bottom 40% of households &Transformation Fund for distressed firms
SRI4: Strengthening the
public sector
• Enhance delivery of Government services• Social safety net for bottom 40% of households &
Transformation Fund for distressed firms• Use result-based budgeting & strengthen public
finance management i.e GST
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Measures related to SMEs
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• Reduce income disparity by focusing on bottom 40% of
households & business owners• Promote equal & fair access to business opportunities including
setting up of Equal Opportunities Commission• Social safety net for bottom 40% of households &
Transformation Fund for distressed firms
• Create an eco-system for entrepreneurship through easing of
entry/exit of firms & revamping seed & VC funds for budding
entrepreneurs• Promote environment for innovation through incentives funding
and establishment of innovation lending institutions
• E&E - focus on new niche areas i.e. R&D and design• Agriculture - high value activities i.e. large scale, high yields &
new technologies• Services – promote new areas i.e. education, tourism (medical
tourism, edu-tourism & eco- tourism), Islamic finance, green
technology, biotechnology & creative industries• Support innovative SMEs by changing credit assessment from
conventional lending to partial guarantees
• Support green technology investment through VC funds• Credit assessment by banks for green investment using non-
collateral based criteria
SRI5: Transparent and
market-friendlyaffirmative action
SRI6: Building
knowledge base andinfrastructure
SRI7: Enhancing
sources of growth
SRI8: Ensuring
sustainability of growth
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Measures related to SMEs
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Developing SMEs as the Engine of Growth and Innovation
Encourage collaboration between
foreign and local SMEs, particularly in
modern technology
Support SMEs at early stage
& those that have potential to
become global players
Access to Financing
• RM3 bil for Working CapitalGuarantee Scheme of which half for
Bumiputera entrepreneurs• RM500 mil Mudharabah Innovation
Fund• RM150 mil Business Growth Fund• Increase financial resources of
SME Bank & Agro Bank• Adequate financial allocation to
SME Corp. Malaysia• AIM and TEKUN micro-credit
facilities for estate workers
Green Lane for Procurement
• For SMEs that havepenetrated international
markets, obtained recognition
in terms of quality &
innovation.Skills Upgrading• Expand the scope of the HRDF
and SME Corp. grants
• Skills training for school drop-outs
• Enhancement of technical
education and vocational
training• RM500 million for Skills
Development Fund Corp.
Social Justice Policy• Raise the income and quality of
life of the bottom 40% household• Reduce price controls and
subsidies in stages
Labour Market Efficiency• Talent Corporation• Streamline foreign worker
employment policy
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… and RMK10 focuses on unlocking growthpotential of SMEs
Bumiputera Development
Agenda: New Approach• Areas of equity & property
ownership, skills &
entrepreneurship,• A high-level Council
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• High value added natural
resources downstreamactivities• Development of indigenous
technology• Corridors• Eco-tourism• Green technology• Alternative energy
generation
• E&E (high value add
segments, shared
services, partnership)• Islamic Finance
• Commercial agriculture
• Integrated Tourism
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SMEs to venture into untapped areas withhighmultiplier effect that raise productivity
levels
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Emphasis would be to promote areas with highgrowth potential under NKEAs
Manufacturing Services Agriculture
Oil, Gas and
Energy
Palm Oil and
relatedproducts
Financial
Services
Wholesale and
Retail Trade
Tourism CCI
Education
Services
Electrical &
Electronics
Business
Services
Agriculture
Greater KL Healthcare
Innovation
Skilled labour force
Creativity
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• Wholesale & retail
trade• New areas in
tourism• Business &
financial services• ICT• Private healthcare
• Private education• Constructionservices
• Franchise business, direct selling, e-
commerce, specialised SME &modern retail outlets
• Medical tourism, (MICE), eco-tourism• Professional services on new areas• Outsourcing activities• Wealth management, insurance &
unit trust businesses
• Creative industry
Development
activities relating tothe NKEA andGreater KL
• High value addedactivities alongvalue chain of E&E
sector• Supporting industryto:
−tourism sector;−oil & gas industry;and
−agriculture sector.
• R&D and design• Precision machining• Fabrication of oil & gas industry
equipment• Cottage industry• Downstream resource-based
industries• Green technology
• Strengthening of existing industrialcluster
• Development of new industrialcluster . e.gdownstreamactivities in palm oil
• Large-scaleroduction
Swiflet farming, aquaculture,seaweed, sa o, ornamental fish,
• Centraliserocurement or
Sectoral focus in creating an advantageousbusiness ecosystem
Services
Manufacturing
Agriculture
FocusInitiative
sOpportun
ities
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INITIATIVES FOR 2011
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Programmes to beimplemented in
2011
SME Corp will continue to develop SMEs as theengine of growth & innovation…
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Promote
development
of competitive
and resilient
SMEs in all
sectors
towards
increasingSME
contribution to
the economy
• BAP* (for SMEs) and E² (for micro
enterprises) - Programme-based
approach to develop dynamic,
competitive & resilient SMEs
• SCORE – as tool to identify capable
companies• 1- InnoCERT Programme – promote
and support the development of
innovative SMEs
• The National Mark for Malaysian
Brand - to increase awareness on the
importance of branding
• Skills Upgrading – provides training to
enhance the skills and capabilities of
employees of SMEs
• Soft Loan for SMEs – existing
programme, channelled through MIDF
• Bridging Financing
* To be implemented in collaboration with SME Bank
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Programme-based Approach
Programme-based approach
BAP E²
Reduced funding for grant & loan from average RM239 m / year
(RMK9) to RM125 m / year (RMK 10)
Large numbers and high expectations of SMEs & Stakeholders
Capacity building is still very much required
DYNAMIC, COMPETITIVE &
RESILIENT SMEs
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BAP
E²
Programme-based approach (cont.)
Diagnose and identify
strengths & weaknesses of
SMEs
Business advisory and
recommend action plan to
SMEs
Capacity building
Provide and facilitate financial
support
In collaboration with SME Bank
In collaboration with Bank Rakyat
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Conclusion
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Towards producing national, regional and global champions
Vision
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One Referral Centre (ORC)
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One Referral Centre (ORC)
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Towards producing national, regional and global champions
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One Referral Centre (ORC)
22
Towards producing national, regional and global champions
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One Referral Centre (ORC)
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Towards producing national, regional and global champions
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SME Business Counsellor
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Provide business advisory & counselling to SMEs through effective coordination
and business support, focusing on 5 areas
BUSINESS COUNSELLORS
M
an a g em ent
Pr o d u ct i on
M ar k et i n g
F i n an ci al
H um an
R e s o ur c e
DYNAMIC, COMPETITIVE & RESILIENT SMEs
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SMECORP STATUS[Ref. No]
SMECORP BORANG[alamat emeil]
SME BUSINESS CENTRE
Business AdvisoryServices (BAS)
VIRTUAL SME
INFORMATION CENTREwww.smecorp.gov.my
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1-300-88-1801
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& Other Information
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