year 2011

1. REALIGNING MALAYSIAN SMEs TO THE
NEW ECONOMIC MODEL
AND 10TH MALAYSIA PLAN

2. Contents
SMEs in Malaysia
Targeted Approach in SME Development
SMEs in NEM and RMK10
Way Forward
2

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 nation's
economy
Provide support to growth of new &
existing areas
Promote private sector-led growth
Source: Census of Establishments & Enterprises 2005 3

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. 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. Going forward, SMEs are important endogenous source
of 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. Promoting balanced SME development
New Economic
Creating national
Model:
champions that
Creation of a
become regional
high-income
/ international
nation
players
7

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. 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. Measures related to SMEs
• Reduce income disparity by focusing on bottom 40% of
SRI5: 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 funds
sustainability of growth • Credit assessment by banks for green investment using non-
collateral based criteria
10

11. … and RMK10 focuses on unlocking growth
potential of SMEs
Developing SMEs as the Engine of Growth and Innovation
Support SMEs at early stage Encourage collaboration between
& those that have potential to foreign and local SMEs, particularly in
become global players modern technology
Access 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. SMEs to venture into untapped areas with high
multiplier 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. Emphasis would be to promote areas with high
growth potential under NKEAs
Innovation
Manufacturing Services Agriculture
Creativity
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. Sectoral focus in creating an advantageous
business 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 new
Manufacturing
• 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. 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. INITIATIVES FOR 2011
16

17. SME Corp will continue to develop SMEs as the engine
of 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. One Referral Centre (ORC)
18

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. 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. 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. 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. Branding for
SMEs
23

24. THE NATIONAL MARK OF MALAYSIAN BRAND
Depicts Quality, Excellence Launched on 2 March 2009
and 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. 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. 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

27. THE NATIONAL MARK OF MALAYSIAN BRAND
27

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 sustainability
How 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. Business Accelerator (BAP) and
Enrichment & Enhancement (E²)
Programmes

30. Programme-based approach
BAP E²
DYNAMIC, COMPETITIVE &
RESILIENT SMEs
30

31. Diagnose and identify strengths & Programme-based
weaknesses of SMEs
approach
Business advisory and
recommend action plan to SMEs
BAP E²
Capacity and capability building
(Training, Business linkages
matching, Branding)
Access to Financing (Commercial DYNAMIC, COMPETITIVE
Banks, Development FIs, & RESILIENT SMEs
Ministries and Agencies)
31

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. PROCESS FLOW
NO
START 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. 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. 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. 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. 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 pelaksanaan
program pembangunan. Sila ambil maklum bahawa SME Corp. Malaysia tidak
pernah 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. Q&A
38

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 www.smecorp.gov.my
SMECORP STATUS [Ref. SMECORP BORANG [alamat
No] emeil]
Find us on Facebook
SME Corp. Malaysia