Realigning Malaysian SMEs to the New Economic Model & 10th Malaysia Plan - by SME Corp


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Realigning Malaysian SMEs to the New Economic Model & 10th Malaysia Plan - by SME Corp

  2. 2. Contents SMEs in Malaysia Targeted Approach in SME Development SMEs in NEM and RMK10 Way Forward 2
  3. 3. SMEs are the backbone of the economy • 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 Important domestic source of growth Foundation & support in supply chain through forward & backward linkages Balanced growth Strengthen resilience of the nations economy Provide support to growth of new & existing areas Promote private sector-led growth Source: Census of Establishments & Enterprises 2005 3
  4. 4. Currently, SMEs are mainly in the services sector• 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 Manufacturing Plantation and horticulture Agriculture (7.2 %) (65.6%) (6.2 %) Fishery and its services activities (20.8%)Textiles & Apparels Poultry farming (7%)(23.4%)Food & Beverages (15%)Metal & metal products(13%) Services Wholesale & Retail (55.5%) (86.6 %) Restaurant & Hotel (15.2%) Transport & Communication (6.5%) Source: Census of Establishments & Enterprises 2005 4
  5. 5. Performance of SMEs outpaced the overall economy 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) GDP Annual Growth (2000 price) GDP & SME Growth SME Contribution to: GDP 31.2% Employment 56.4% Exports 19% 5
  6. 6. Going forward, SMEs are important endogenous sourceof growth towards building a high income nation SMEs are bedrock of high income economy Targeted SME intervention to Employment lift bottom 40% providers / talent source SMEs in the NEM & RMK10 SMEs form critical SMEs important mass to support for inclusive innovation, creativity and sustainable and growth growth Large firms cannot exists in isolation, require strong SME 6
  7. 7. Promoting balanced SME developmentNew Economic Creating national Model: champions that Creation of a become regional high-income / international nation players 7
  8. 8. SME policies to be aligned to the NEM SRI1: Re-energising the private sector to drive growth SRI2: Developing a quality SRI8: Ensuring sustainability workforce & reducing of growth dependency on foreign labour SRI7: Enhancing sources of SRI3: Creating a competitive growth domestic economy SRI6: Building knowledge base SRI4: Strengthening the public and infrastructure sector SRI5: Transparent and market- friendly affirmative action 8
  9. 9. Measures related to SMEs • Promote SME growth in innovative & technologically SRI1: Re-energising the advanced areas private sector • Facilitate timely access to funding • More support & assistance for micro enterprises • Creating regional champions • Creating ecosystem for entrepreneurship & innovation SRI2: Developing a quality workforce & • Upgrading of skills through education & training reducing dependency • Reduce dependency on foreign labour through levy on foreign labour system • Building entrepreneurship through initiatives to support micro enterprises & start-ups SRI3: Creating a • Remove market distortions through removal of price competitive domestic controls & subsidies economy • Social safety net for bottom 40% of households & Transformation Fund for distressed firms • Enhance delivery of Government services SRI4: Strengthening the • Social safety net for bottom 40% of households & public sector Transformation Fund for distressed firms • Use result-based budgeting & strengthen public finance management i.e GST 9
  10. 10. Measures related to SMEs • Reduce income disparity by focusing on bottom 40% ofSRI5: Transparent and households & business owners market-friendly • Promote equal & fair access to business opportunities including affirmative action 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 SRI6: Building entry/exit of firms & revamping seed & VC funds for budding knowledge base and entrepreneurs infrastructure • 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 SRI7: Enhancing • Services – promote new areas i.e. education, tourism (medical sources of growth 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 SRI8: Ensuring • Support green technology investment through VC fundssustainability of growth • Credit assessment by banks for green investment using non- collateral based criteria 10
  11. 11. … and RMK10 focuses on unlocking growthpotential of SMEs Developing SMEs as the Engine of Growth and InnovationSupport SMEs at early stage Encourage collaboration between& those that have potential to foreign and local SMEs, particularly in become global players modern technologyAccess to Financing Green Lane for Procurement Bumiputera Development• RM3 bil for Working Capital • For SMEs that have penetrated Agenda: New Approach Guarantee Scheme of which half for international markets, obtained • Areas of equity & property Bumiputera entrepreneurs recognition in terms of quality ownership, skills &• RM500 mil Mudharabah Innovation & innovation. entrepreneurship, Fund • A high-level Council Skills Upgrading• RM150 mil Business Growth Fund • Expand the scope of the HRDF Social Justice Policy• Increase financial resources of SME and SME Corp. grants • Raise the income and quality of Bank & Agro Bank • Skills training for school drop- life of the bottom 40% household• Adequate financial allocation to outs • Reduce price controls and SME Corp. Malaysia • Enhancement of technical subsidies in stages• AIM and TEKUN micro-credit education and vocational facilities for estate workers Labour Market Efficiency training • RM500 million for Skills • Talent Corporation Development Fund Corp. • Streamline foreign worker employment policy 11
  12. 12. SMEs to venture into untapped areas with highmultiplier effect that raise productivity levels • High value added natural resources downstream activities • Corridors • Development of indigenous • Eco-tourism Natural technology • Green technology endowment • Alternative energy generation Sectors with Locational AREAS TO comparative concentration VENTURE INTO: advantage • Commercial agriculture • Integrated Tourism Industries Malaysia has • E&E (high value add early mover segments, shared advantage services, partnership) • Islamic Finance 12
  13. 13. Emphasis would be to promote areas with highgrowth potential under NKEAs Innovation Manufacturing Services AgricultureCreativity Wholesale Palm Oil and Oil, Gas and Financial and Retail related Energy Services Trade products Tourism ICT Education Electrical & Business Agriculture Services Electronics Services Greater KL Skilled labour force 13
  14. 14. Sectoral focus in creating an advantageousbusiness ecosystem Focus Opportunities Initiatives • Wholesale & retail trade • Franchise business, direct selling, e-commerce, Development activities • New areas in tourism specialised SME & modern retail outlets relating to the NKEA and • Business & financial • Medical tourism, (MICE), eco-tourism Greater KL Services services • Professional services on new areas • ICT • Outsourcing activities • Private healthcare • Wealth management, insurance & unit trust • Private education businesses • Construction services • Creative industry • High value added • R&D and design • Strengthening of existing activities along value • Precision machining industrial cluster chain of E&E sector • Fabrication of oil & gas industry equipment • Development of newManufacturing • Supporting industry to: • Cottage industry industrial cluster . e.g − tourism sector; • Downstream resource-based industries downstream activities in − oil & gas industry; and • Green technology palm oil − agriculture sector. • Large-scale production Swiflet farming, aquaculture, seaweed, sago, • Centralise procurement • Good agriculture ornamental fish, herbs and spices, organic fruits, or bulk purchase of practices vegetables, mushroom and floriculture. agriculture inputs to Agriculture • Agronomic reduce input costs management and • Collaborative R&D with mechanisation established agriculture institutes 14
  15. 15. Conclusion During economic SME Masterplan SME growth shocks, SMEs are Shift towards requires bold consistently stabilisers of outcome-based measures for outperformed growth – SMEs approach in quantum leap in overall economy adjust better to monitoring GDP and to in last 5 years changes in market programmes reach developed conditions compared with nation by 2020 large enterprises Recovery of SMEs firmly established but SMEs continue to face challenges Vision Produce national, regional and global champions 15
  16. 16. INITIATIVES FOR 2011 16
  17. 17. SME Corp will continue to develop SMEs as the engineof growth & innovation… Programmes to be implemented in 2011 • BAP (for SMEs) and E² (for micro Promote enterprises) - Programme-based approach development to develop dynamic, competitive & resilient SMEs of competitive • SCORE – as tool to identify capable and resilient companies • 1- InnoCERT Programme – promote and SMEs in all support the development of innovative sectors SMEs • The National Mark for Malaysian Brand - to towards increase awareness on the importance of increasing branding • Skills Upgrading – provides training to SME enhance the skills and capabilities of contribution to employees of SMEs • Soft Loan for SMEs – existing programme, the economy channeled through MIDF • Bridging Financing 17
  18. 18. One Referral Centre (ORC) 18
  19. 19. One Referral Centre (ORC) Business Advisory SME Registry Membership Info Centre ONE Virtual ORC REFERRAL Link of CENTRE Ministries/ Agencies Towards producing national, regional and global champions Product Gallery Pocket Talk Resource Centre 19
  20. 20. One Referral Centre (ORC) BUSINESS ADVISORY - Business Counsellor - SEAP Experts INFO CENTRE Centralized Call Centre consists of : Info Line, Info Email, General Line LINK OF MINISTRIES & AGENCIES Referral Counter for Ministries, Agencies, Banks & DFIs Towards producing national, regional and global champions RESOURCE CENTRE - Library - Business Centre : Photostat, printing, etc - Touch screen kiosk + Internet Kiosk 20
  21. 21. One Referral Centre (ORC) POCKET TALK - Talk from SME Corp. -Talk from other Ministries, Agencies, Banks, DFIs - Company presentation - Book Launch/ Review PRODUCT GALLERY Showcase of products by Industry/sector cluster - Thematic showcase - Events/ programme VIRTUAL ORC Towards producing national, Corporate Website global champions - SME Corp. regional and - SME Info Portal SME REGISTRY MEMBERSHIP - Membership Card - Enjoy Benefits : current updates & Invitation for events & programmes 21
  22. 22. SME Business Counsellor BUSINESS COUNSELLORS Provide business advisory & counselling to SMEs through effective coordination and business support, focusing on 5 areas Human Resource Human Resource Management Management Production Production Marketing Marketing Financial Financial DYNAMIC, COMPETITIVE & RESILIENT SMEs 22
  23. 23. Branding forSMEs 23
  24. 24. THE NATIONAL MARK OF MALAYSIAN BRAND Depicts Quality, Excellence Launched on 2 March 2009and Distinction of local SMEs by HRH the Crown products and services Prince of Perak, Raja Dr. Nazrin Shah The abstract design represents a Malaysian flower from the word “MSIA” 24
  25. 25. THE NATIONAL MARK OF MALAYSIAN BRAND PRE REQUISITE Business incorporated / registered under the following: • Companies Act 1965 (Act 125); • Registration of Business Act 1965 (Act 197); or • Certificate(s) of Practice from Professional Bodies. Operating from legal premises A minimum 3 – STAR rating under SME Corp SCORE programme For companies in any sector with Certified ISO 9001 or equivalent; For companies in Food Sector with HACCP or ISO 22000; or For companies in Automotive Supply Chain with ISO/TS16949;or For companies in Medical Device Sector with ISO 13485; and Owns a Registered Brand 25
  26. 26. THE NATIONAL MARK OF MALAYSIAN BRAND Priority lane for the Brand Access to MATRADE’s Promotion Grant under local and international trade MATRADE promotion and A&P activities BENEFITS Special access passes to Invitation to specific training by SME MICCI-SME Corp. Malaysia Corp. Malaysia and its partners mentoring programmes 26
  28. 28. ASSESSMENT CRITERIA How the company allocates How the top management provides its resources to maintain guidance and direction towards the brand and ensure maintaining the brand success business sustainabilityHow the company contributes How the company to its stakeholders, systematically manages society & environment as all customer and consistently it pursue its journey delivers the brand towards brand excellence promise over time How the company maintains, controls, improves its How the company ensure internal processes towards all processes needed for the brand improving brand equity and promise are established, implemented ensure business sustainability and maintained to meet/exceed How the company plans its clients’ requirements action to ensure products/services consistently meet/exceed standards or brand promise 28
  29. 29. Business Accelerator (BAP) andEnrichment & Enhancement (E²) Programmes
  30. 30. Programme-based approach BAP E² DYNAMIC, COMPETITIVE & RESILIENT SMEs 30
  31. 31. Diagnose and identify strengths & Programme-basedweaknesses of SMEs approachBusiness advisory andrecommend action plan to SMEs BAP E²Capacity and capability building(Training, Business linkagesmatching, Branding)Access to Financing (Commercial DYNAMIC, COMPETITIVEBanks, Development FIs, & RESILIENT SMEsMinistries and Agencies) 31
  32. 32. Programme value proposition Holistic approach including measuring outcome and impact to the SMEs leading to long term solutions and sustainability Accelerate the development and performance of SMEs in a more comprehensive manner using structured methodology Enhance the developmental role of SME Corp Facilitate by SME Business Counsellors (JICA trained) and leverage on SEAP experts Reduce dependency on Government subsidies and ensure SMEs/MEs prosper through main stream financial ecosystem 32
  33. 33. PROCESS FLOW NOSTART Request to Screening Participate YES SMEs (SCORE) 2-star to 5-star SCORE / Action Plan M-CORE Micro Enterprises of Level 2 & Level 3 (M-CORE) NO Endorsement END by SMEs YES Implementation Re-SCORE /M-Core and Monitoring Performance 33
  34. 34. BAP: Eligibility Criteria • SMEs incorporated under the Companies Act 1965 OR Registration of Businesses Act, 2001: REGISTERED - manufacturing sector – sales turnover not more than RM25 mil or full time employees not more than 150 BUSINESSES - services sector – sales turnover not more than RM5 mil or full time employees not more than 50 • At least 60% Malaysian equity EQUITY • LSIs shareholding of not more than 20% • VCs / Co-ops shareholding of not more than 30% • Valid premise/business license from local authorities LICENSE • Registration with Professional Bodies • Other required permit/approval from relevant authority • Not eligible to recipients of previous grant schemes of SME Corp OTHER / SMIDEC (applicable to both owner and company) • Must undergo SCORE assessment with result of 2 to 5-Star CRITERIA • At least 6 months in operation 34
  35. 35. E²: Eligibility Criteria • MEs incorporated under the Companies Act 1965 OR Registration of Businesses Act, 2001: - REGISTERED manufacturing sector – sales turnover not more than RM250,000 or full time employees not more than 5 BUSINESSES - services sector – sales turnover not more than RM200,000 or full time employees not more than 5 • At least 60% Malaysian equity EQUITY • LSIs shareholding of not more than 20% • VCs / Co-ops shareholding of not more than 30% • Valid premise/business license from local authorities LICENSE • Registration with Professional Bodies • Other required permit/approval from relevant authority • Not eligible to recipients of previous grant schemes of SME Corp / SMIDEC (applicable to both owner and company) OTHER • Must undergo M-CORE assessment with result of Level 2 & 3 CRITERIA • At least 6 months in operation • Owner operator and on full time basis 35
  36. 36. Programme-based Approach Framework DYNAMIC, COMPETITIVE & RESILIENT SMEs Advisory & Capacity Access to Diagnostics Technical Building Financing Support One Skills Referral Commercial SCORE Banks Upgrading Centre SEAP DFIs M-CORE Entrepre- neurship Business Training Counsellors Ministries and Brand Business Agencies Awareness Coaches 36
  37. 37. Please be aware of irresponsible parties claiming to be consultants or agents of SME Corp. Malaysia for the implementation of developmental programmes.We hereby inform that SME Corp. Malaysia does not appoint any consultants or agent for any programmes, and the claim pertaining to the above matter is a fraud. Should you have any problem or enquiries, kindly contact our Info Line (1-300-88-1801). Thank you . Management of SME Corp. Malaysia Terdapat pihak – pihak tidak bertanggung jawab mengaku sebagai juru perunding atau agen bagi pihak SME Corp. Malaysia untuk pelaksanaanprogram pembangunan. Sila ambil maklum bahawa SME Corp. Malaysia tidakpernah melantik juruperunding atau agen bagi mana – mana program ini dan dakwaan tersebut merupakan satu penipuan. Sekiranya anda mempunyai sebarang masalah atau pertanyaan, sila hubungi Talian Info ( 1-300-88-1801). Terima kasih. Pihak Pengurusan SME Corp. Malaysia 37
  38. 38. Q&A 38
  39. 39. SME BUSINESS CENTRE INFOLINE Business Advisory 1-300-88-1801 Services (BAS) THANK YOU SMS for SMEs Info VIRTUAL SME & Other Information INFORMATION CENTRE Send to 15888 SMECORP STATUS [Ref. SMECORP BORANG [alamat No] emeil] Find us on Facebook SME Corp. Malaysia