Role in Developing Entrepreneurship in Malaysia

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  • BACKGROUND ON MALAYSIA
  • BACKGROUND ON MALAYSIA
  • Three (3) Main Strategic Thrust On SME Development Programmes In Malaysia
  • SME CONTRIBUTION TO GDP
  • Three (3) Main Strategic Thrust On SME Development Programmes In Malaysia
  • AIM Role In Developing Entrepreneurship In Malaysia
  • AIM Role In Developing Entrepreneurship In Malaysia
  • CENTER MEETING
  • Entrepreneur Workshop
  • Entrepreneur Seminar Activities
  • CONCLUSION
  • Role in Developing Entrepreneurship in Malaysia

    1. 1. AMANAH IKHTIAR MALAYSIA (AIM) ROLE IN DEVELOPING ENTREPRENEURSHIP IN MALAYSIA ADFIAP Meeting April 20-23, 2011 Acapulco Beach Club & Resort Hotel, Kyrenia, North Cyprus www.aim.gov.my CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    2. 2. <ul><li>Introduction </li></ul><ul><li>Macro View On SME In Malaysia </li></ul><ul><li>AIM’s Role in Developing Entrepreneurship Among Poor and Low Income Households </li></ul><ul><li>AIM’s Micro-Credit Program </li></ul><ul><li>AIM’s Strategy To Enhance Entrepreneurship </li></ul><ul><li>Success Story </li></ul><ul><li>Impact Studies </li></ul><ul><li>Conclusion </li></ul>Content CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    3. 3. CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    4. 4. Malaysia Background - 2010 Area 330,803 Sq. Km Temperature 21 C to 32 C Population 28.3 Million Ethnic Malay, Chinese, Indian, Other Bumiputera & Others Labour force 12.2 Million Employment 11.8 Million Unemployment 3.6 % Major Products Rubber, Crude palm oil, Sawlogs, Crude oil & Natural gas Nominal GDP RM766.3 Billion Real GDP growth rate 6.0 % Per capita income RM23,841 (US8,256) Exchange rate (RM/US) 3.31 CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    5. 5. <ul><li>Representing 99.2 % of all businesses in Malaysia </li></ul><ul><li>Contributing 56.4 % of total employment </li></ul><ul><li>Contributing 31.4% to GDP in 2008 </li></ul><ul><li>86.6 % SMEs in services sector, 7.2 % in manufacturing and 6.2 % in Agriculture sectors. </li></ul>Macro View On Small and Medium Enterprise (SME) In Malaysia CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    6. 6. SME’s Contribution To Malaysian GDP CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    7. 7. <ul><li>Strengthening the enabling infrastructure </li></ul><ul><li>Building the capacity and capability of domestic SMEs </li></ul><ul><li>Enhancing access to financing by SMEs </li></ul>Three (3) Main Strategic Thrust On SME Development Programs In Malaysia CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    8. 8. <ul><li>Formulation and enactment or review and amendment guidelines, licensing requirement and fiscal incentives governing the operations and activities of SMEs and entrepreneurs </li></ul><ul><ul><ul><ul><li>Developing and enhancing physical infrastructure </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Information management </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Regulations and operation </li></ul></ul></ul></ul>1 . Strengthening The Enabling Infrastructure CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    9. 9. <ul><li>Policies or programs to enhance the knowledge, skills and ability of SMEs and their employees towards improving their performance, growth and competitive. </li></ul><ul><ul><ul><ul><li>Entrepreneur development </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Human capital development </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Advisory services </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Awareness and outreach </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Technology enhancement </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Product development </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Marketing and promotion </li></ul></ul></ul></ul>2. Building The Capacity And Capability Of Domestic SMEs CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    10. 10. <ul><li>Policies or programmes to ensure adequate access to financing to support the growth and development of SMEs across all sectors </li></ul><ul><ul><ul><li>Early stage financing </li></ul></ul></ul><ul><ul><ul><li>Business expansion financing </li></ul></ul></ul><ul><ul><ul><li>Rehabilitation </li></ul></ul></ul>3. Enhancing Access To Financing By SMEs CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    11. 11. Aim’s Role In Developing Entrepreneurship Among Poor And Low Income Households <ul><li>Established on 17 th September 1987 as a Registered Private NGO and regulated by the Instrument of Trust of Amanah Ikhtiar Malaysia. </li></ul><ul><li>Established for the purpose of assisting poor and low income households to lift themselves out of poverty primarily by means of loans to be used for financing income generating activities. </li></ul>CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    12. 12. Aim’s Role In Developing Entrepreneurship Among Poor And Low Income Households <ul><li>AIM’s Micro credit program acts as a platform to encourage poor household to be entrepreneur by starting as micro entrepreneur and groom them to become small and medium entrepreneurs (SME’s). </li></ul><ul><li>Mandated by the Government to produce 4,000 Women Small and Medium Entrepreneurs by end of 2012 under the National Key Result Area </li></ul>CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    13. 13. <ul><li>Exclusive Focus on the Poor and Low Income households </li></ul><ul><li>Specialized Credit Delivery System </li></ul><ul><li>Specially-trained Professional Staff </li></ul><ul><li>Supportive National Framework </li></ul>Essence of AIM’s Approach CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    14. 14. <ul><li>Target Group: Poor and Low Income Women </li></ul><ul><li>Products </li></ul><ul><ul><li>Micro financing for income generating activities </li></ul></ul><ul><ul><li>Micro financing for social/ consumption purposes </li></ul></ul><ul><ul><li>Compulsory Saving </li></ul></ul><ul><ul><li>Welfare Fund </li></ul></ul><ul><li>Lending Methodology </li></ul><ul><ul><li>Solidarity Group (Grameen Bank Approach) </li></ul></ul><ul><ul><li>Human Potential Development </li></ul></ul><ul><ul><li>Social Agenda Development </li></ul></ul>AIM’s Micro-Credit Program CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    15. 15. AIM’s Products Activity Description Purpose 1. Micro-Financing for income generating activities (Economic Loans) First loan is up to RM 3,000 (USD 906) continuous loan based on repayment record and discipline. Maximum loan : RM 50,000 (USD 15,106) To finance income generating activities 2. Educational Loans For members and their family (including children) Skill development and children education 3. Multipurpose Loans Consumption needs including house renovation Increase well-being CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    16. 16. AIM’s Products CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977 Activity Description Purpose 4. Compulsory savings/ group fund Ranging from RM 1 to 15 (USD 0.32 to 4.84) Group fund loan & savings withdrawal. 5. Welfare Fund (voluntary) RM 1 per month 1% contribution deducted from economic loan. Covering natural disaster, fire, hospitalisation, critical illness and death
    17. 17. Family Income below poverty line (First time borrowers ) Agree to form a group of 5 No Collateral, No Guarantor No Threat of Legal Action Weekly Repayment Weekly Center Meeting Weekly Saving Loan Covered by “micro-insurance” Administrative charge Continuous Loan Loan Conditions CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    18. 18. Achievement As At December 2010 Total Members 253,631 Total Staff 1,576 No of Branches 87 No of Centers 6,604 No of Groups 59,901 Total Disbursement (RM Billion) USD Billion equivalent 4.83 1.56 Total Loan Outstanding (RM Million) USD Million equivalent 890.61 287.29 Repayment Rate (%) 99.5% CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    19. 19. Loan Activities CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    20. 20. Sources of Loan Fund As at Dec 2010 No Source of Fund RM Million 1 Federal Government - Soft Loan 738.0 2 Federal Government - Grant 249.0 3 Grant from Donor 19.3 4 Bank Muamalat Malaysia 4.0 TOTAL : 1,010.3 CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    21. 21. <ul><li>Suitable loan conditions </li></ul><ul><li>Simple procedures, training and test </li></ul><ul><li>Group Formation </li></ul><ul><li>Self-chosen loan activities </li></ul><ul><li>Collective responsibilities </li></ul><ul><li>Small loans and weekly repayment </li></ul><ul><li>Strict credit discipline </li></ul><ul><li>Close supervision </li></ul><ul><li>Availability of subsequent loans </li></ul><ul><li>Compulsory savings </li></ul>Specialized Delivery System CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    22. 22. Outreaching the poor CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    23. 23. Group Training CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    24. 24. Group Recognition Test CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    25. 25. Center Meeting CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    26. 26. Center Meeting CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    27. 27. AIM’s Strategy To Enhance Entrepreneurship CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    28. 28. Head Unit Business Development Manager Training Information System Promotion Planning Support Staff Administration Strategy 1: Strengthen Entrepreneur Development Unit CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    29. 29. Strategy 2: Introducing New Loan Product (I-Usahawan) Scheme RM I- Mesra & I- Sri Kandi 100 – 19,900 I-Wawasan 20,000 – 50,000 I- Usahawan  51,000 – 300,000 CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    30. 30. <ul><ul><ul><li>Develop information system - monitoring and tracking. </li></ul></ul></ul><ul><ul><ul><li>On web-based - easy access. </li></ul></ul></ul><ul><ul><ul><li>Include progress information of each member. </li></ul></ul></ul>Strategy 3: Develop Database System for AIM Entrepreneur CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    31. 31. <ul><ul><ul><li>Develop Training Entrepreneur Module based on AIM’s experience. Module includes: </li></ul></ul></ul><ul><ul><li>Motivation </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><ul><li>Operational and administration </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Business plan </li></ul></ul><ul><ul><li>Business Entity </li></ul></ul><ul><ul><li>Accounting </li></ul></ul><ul><ul><li>New Business opportunities etc </li></ul></ul>Strategy 4: Holistic and Well Plan Training Program CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    32. 32. 2 . Divide training in 3 stages . Strategy 4: Cont’d Holistic and Well Plan Training Program Stage Module Participant Basic Basic Entrepreneurship Potential entrepreneur Enhancement Focus on certain area of business Micro and Small Entrepreneur Advance Very focus and market expansion globally Medium Entrepreneur CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    33. 33. <ul><ul><ul><li>Develop traıner training program specially for AIM’s field staff. </li></ul></ul></ul><ul><ul><ul><li>Various Implementation strategy including short courses, workshop, ‘business coaching’, field exposure, mentor-mentee, seminar and etc. </li></ul></ul></ul><ul><ul><ul><li>Successful entrepreneurs will be encouraged to participate in training programs. </li></ul></ul></ul><ul><ul><ul><li>Supporting Agencies also involved in certain areas like branding, packaging and technical knowhow </li></ul></ul></ul>Strategy 4: Cont’d Holistic and Well Plan Training Program CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    34. 34. <ul><ul><ul><li>Launching rebranding programme, taking into account AIM’s role in upgrading the quality of members products. </li></ul></ul></ul><ul><ul><ul><li>Expanding marketing and increase the sale of members products to high-end market through supermarkets and wholesale markets in Malaysia and abroad. Leveraging on networking among members and MNC’s. </li></ul></ul></ul><ul><ul><ul><li>Increase sales promotion via internet </li></ul></ul></ul><ul><ul><ul><li>Sharing AIM’s entrepreneur and success story via mass media. </li></ul></ul></ul><ul><ul><ul><li>Exhibition and sales carnival whether sponsored by AIM or other agencies. </li></ul></ul></ul>Strategy 5: Planning and Implementing Marketing Efforts More Aggressively, Domestic and Global CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    35. 35. <ul><li>Business transformation is an important strategy to change the size and progress of any business. To achieve this, requires bigger capital, expert mentor, support systems and effective training . </li></ul>Strategy 6: Business Transformation Existing Business Transformation Capital Required Retail Shop Mini Market/Supermarket RM 100- 200k Stall Restaurant RM 100- 200k Tailor Shop Boutique and fashion house RM 51- 100k CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    36. 36. <ul><ul><ul><li>1 . Establish Entrepreneur Representative Board . Developing the formal structure of organisation for members. Structure have 5 levels i.e. national, regional, branch, block and centre. Function among others; </li></ul></ul></ul><ul><ul><ul><li>Catalyst to develop entrepreneur </li></ul></ul></ul><ul><ul><ul><li>Planning, implementing and monitoring </li></ul></ul></ul><ul><ul><ul><li>As a network </li></ul></ul></ul><ul><li>2. Establish consortium or member’s cooperative. Encourage collaboration among members to market products. </li></ul>Strategy 7: Collaboration and Cooperation Among Members CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    37. 37. <ul><li>Currently developed jointly with other providers. Applicable to all, however modifications to be made to suit one’s requirement. </li></ul><ul><li>Encourage members to set up business in-line with the pre-determined standard. Ease monitoring process. </li></ul>Strategy 8: Standardization and Recognition CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    38. 38. <ul><li>Programs: </li></ul><ul><li>Business Training and Business Coaching </li></ul><ul><li>Seminars </li></ul><ul><li>Financial Management </li></ul><ul><li>Accounting </li></ul><ul><li>Marketing </li></ul><ul><li>Sales Carnival </li></ul><ul><li>Site and Study Visits </li></ul>Entrepreneurship Development Program CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    39. 39. Workshop CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    40. 40. Seminar CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    41. 41. CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    42. 42. Page Success Story (1) Name Norazah Binti Che Endut Branch Sik Date Joined 1992 (18 years) First loan RM500 Loan Cycle 8 Current loan RM50,000 Cumulative loan RM97,500 Activity Buying and Selling Scrap rubber Income Before RM 300/month Income After RM 30,000/month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    43. 43. Success Story (2) Name Mary Tangil Branch Sandakan 1 Date Joined 09/03/2001 First loan RM1,000 Loan Cycle 7 Current loan RM36,000 Cumulative loan RM137,000 Activity Car Accessories Income Before RM 300/month Income After RM 20,000/month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    44. 44. Success Story (3) Name Zamilah Ibrahim Branch Bachok Date Joined 06/08/1991 First loan RM 500 Loan Cycle 12 Current loan RM 20,000 Cumulative loan RM 83,300 Activity Produce and Process Herbs Income Before RM 300. /month Income After RM 5,000 /month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    45. 45. Page Success Story (4) Name Rohani Harun Branch Tumpat Date Joined 19/01/1996 First loan RM 500 Loan Cycle 6 Current loan RM 10,000 Cumulative loan RM 89,900 Activity Salt Distributor Income Before RM 270/month Income After RM 8,000/month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    46. 46. Success Story (5) Name Jasmawati Binti Hakim Branch Sandakan 1 Date Joined 09/03/2001 First loan RM1,000 Loan Cycle 13 Current loan RM 50,000 Cumulative loan RM 382,400 Activity Buying and Selling Used Clothes Income Before RM 300 /month Income After RM 3,000 /month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    47. 47. Success Story (6) Name Hajah Nordiana Abd Hamid Branch Sandakan 1 Date of Joined 21/03/2002 First loan RM1,000 Loan Cycle 7 Current loan RM 6,000 Cumulative loan RM 55,000 Activity Buying and Selling Scrap metal Income Before RM350 /month Income After RM3,000 /month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    48. 48. Page Success Story (7) Name Salasiah Binti Yusof Branch Kuala Langat Date Joined 24/5/2004 First loan RM 2,000 Loan Cycle 5 Current loan RM 10,000. Cumulative loan RM 35,000 Activity Food Processing Income Before RM 600/month Income After RM 1,500/month CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    49. 49. Impact of Ikhtiar Loan on Borrowers’ Income (RM) CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    50. 50. Outcome <ul><li>Increase in the household monthly income. </li></ul><ul><li>The bigger the loan size, the more chances to uplift the family from poverty (must go through 3 loan cycles at the average of RM 3,000) </li></ul><ul><li>Evidence of positive changes in their self-development (self-confidence and responsive) </li></ul>CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    51. 51. <ul><li>AIM’s model is rare in the world. AIM gets full government support and funding in line with the wealth associated with a middle income country. </li></ul><ul><li>AIM will continue to complement government’s efforts to alleviate poverty and generate high income level among low income households in order to achieve high income country by 2020. </li></ul>Conclusion CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977
    52. 52. THANK YOU www.aim.gov.my CERTIFIED TO ISO 9001:2000 CERT. NO : MY-AR 4977

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