irda1 sme development

8/2/2019 IRDA1 SME Development

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Module 1:

Micro-Enterprise &Small Business Development


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Malaysian SMEs can be grouped into three categories :Micro, Small, or Medium.

These groupings are decided based on EITHER

a) the numbers of people a business employs OR

b) on the total sales or revenue generated by a businessin a year.

Defining Small and Medium Enterprises (SMEs)


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a) Number of Employees

PrimaryAgriculture

Manufacturing(including Agro-Based) & MRS*

Services Sector(including ICT**)

MicroLess than 5employees

Less than 5employees

Less than 5employees

SmallBetween 5 & 19employees

Between 5 & 50employees


Medium Between 20 & 50employees



*MRS : Manufacturing-Related Services** ICT : Information and Communications Technology


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b) Annual Sales Turnover

PrimaryAgriculture

Manufacturing(including Agro-Based) & MRS*

Services Sector(including ICT**)

MicroLess than

RM200,000

Less than

RM250,000

Less than

RM200,000

Small

BetweenRM200,000 &less than RM1million

Between RM250,000& less than RM10million

Between RM200,000& less than RM1million

MediumBetween RM1million & RM5million

Between RM10million & RM25million

Between RM1 million& RM5 million

*MRS : Manufacturing-Related Services** ICT : Information and Communications Technology


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DevelopingMalaysian SMEs


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Importance of SMEs

Developing a group of diverse and competitive small and mediumenterprises (SMEs) is a central theme towards achievingsustainable economic growth.SMEs are crucial to the economic growth process and play animportant role in the countrys overall production network.

Some advanced economies have succeeded because SMEs forma fundamental part of the economy, comprising over 98% of totalestablishments and contributing to over 65% of employment aswell as over 50% of the gross domestic product.

Although the numbers might be lower in Malaysia, SMEs have thepotential to contribute substantially to the economy and canprovide a strong foundation for the growth of new industries aswell as strengthening existing ones, for Malaysias futuredevelopment.


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Government Strategies

Constituting more than 99% of total business establishments inMalaysia, it is clear that promoting a viable SME sector isessential in the nation's stride towards broadening the sourcesof growth and sustaining the growth momentum. This isreflected in the national development agendas, namely the;

Ninth Malaysia Plan (9MP: 2006-2010),Third Industrial Master Plan (IMP3: 2006-2015),Eighth Malaysia Plan (8MP: 2001-2005) and

Second Industrial Master Plan (IMP2: 1996-2005).


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SME growth under the Ninth Malaysia Plan: 2006-2010 (9MP)

During the 9MP, the principal SME policy is the development of acompetitive, innovative and technologically strong SME sectorthat is able to contribute to the domestic economy andcompete globally. Strategies will be directed at acquiring

technologies to propel SMEs up the value chain in themanufacturing, agriculture and services sector.

These include:

Outsourcing

Inter-firm linkages Entrepreneurship programmes Knowledge skills


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Outsourcing

Programmes will be implemented to nurture SMEs as Research andDevelopment (R&D) partners. Collaborative ventures among Multinational

Corporations (MNCs), Government-linked companies (GLCs) and SMEs will

facilitate technology transfer and skills development and marketing;

Inter-firm linkagesCreating business links between SMEs, GLCs and MNCs would enable SMEs to

be more competitive and become reliable suppliers for global outsourcingnetworks which would expand Malaysia's trade with new export markets;

Entrepreneurship programmesProgrammes, including advisory and outreach services, will be expanded to

equip SMEs with new and improved management and business practices,

methods in production, quality improvement, marketing and distribution; and

Knowledge skillsFurther development of technical skills amongst SMEs, especially in generating

innovation and creating economic value from knowledge application.


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The priority accorded to developing domestic SMEs is further reiterated

in the IMP3. The 15-year blueprint, published hand in hand with the 9MP,

has outlined five clear strategies to support the development of diverse

and competitive SMEs.

The five strategies are:

Competitive Edge - Integration and Rationalisation

Outward Bound - Armed and Prepared in a Global Arena

ICT - Friend Not Foe

Cohesive and Supportive Framework - Encouraging Potential to Shine

Nurturing the Services Sector - Towards New Areas of Growth

With the increased allocation of resources outlined in the 9MP and

IMP3, the Government has demonstrated its strong commitment for the

development of efficient and competitive SMEs; a commitment that is

more significant than ever as Malaysia moves towards realising its

objective of becoming a developed nation.

Strategies under the Third Industrial Master Plan: 2006-2015 (IMP3)


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SME growth under the Eighth Malaysia Plan: 2001-2005 (8MP)

Under its Eighth five-year planning period, the Government introduced a

wide range of assistance programmes for SMEs, all aimed at making themstronger and more competitive.

Highlights include :

Assistance provided through the Small and Medium Enterprise Corporation

Malaysia (SME Corp. Malaysia) to help SMEs to enter export markets;

The creation of the Bumiputera Commercial and Industrial Community

(BCIC) focusing on entrepreneurial, managerial and technical skills

development;

Nurturing ICT-based SMEs by assisting local ICT and multimedia SMEs,particularly the start-up companies; and

Improving SME access to financing through various schemes undertaken by

the Government, Bank Negara Malaysia, and banking institutions.
http://www.smecorp.gov.my/http://www.smecorp.gov.my/http://www.smecorp.gov.my/http://www.smecorp.gov.my/http://www.smecorp.gov.my/http://www.smecorp.gov.my/


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Strategies under the Second Industrial Master Plan: 1996-2005 (IMP2)

Efforts to strengthen SMEs were also underscored in the 10-year IMP2.Developing stronger SMEs required major changes in themanufacturing sector, as SMEs made up over 90% of the countrysmanufacturing sector.

IMP2 programmes were designed to develop a resilient, broad basedand internationally competitive manufacturing sector.

Emphasis was placed on helping manufacturers adapt to thechanging global environment. Help was also given to make thesebusinesses more competitive in all respects. Efforts were made to

vertically integrate manufacturers supply chains, in order to enhanceoverall economic efficiency.

Development of Malaysian-grown brands was encouraged, as wasthe use of ICT tools.


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Government Programmes

To support the development of SMEs, the Government providesa comprehensive set of programmes through the various

Ministries and Agencies, which are broadly categorized into

"Financial Assistance" and

"Business Support Services"
http://smeinfo.com.my/index.php?ch=2&pg=3http://smeinfo.com.my/index.php?ch=2&pg=3http://smeinfo.com.my/index.php?ch=2&pg=3http://smeinfo.com.my/index.php?ch=2&pg=3http://smeinfo.com.my/index.php?ch=2&pg=3


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Financial AssistanceBy Type of Financial Assistance

Soft loansGrants

Equity FinancingVenture CapitalGuarantee SchemeTax Incentives
http://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=finspechttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=granthttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=equityhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=ventcaphttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=guaranteehttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=taxincentivehttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=taxincentivehttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=guaranteehttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=ventcaphttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=equityhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=granthttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=finspec


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Financial AssistanceBy Purpose of Financial Assistance

Strengthening Skills of Workforce

Entrepreneur DevelopmentMarketing & PromotionProduct Development & Quality AccreditationTechnology DevelopmentDebt RestructuringGeneral
http://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=hrdevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=entdevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=markethttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=proddevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=techdevhttp://smeinfo.com.my/index.php?tpl_id=13&ch=2&pg=84&ac=105&pass=scheme&fundtype=debthttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=generalhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=generalhttp://smeinfo.com.my/index.php?tpl_id=13&ch=2&pg=84&ac=105&pass=scheme&fundtype=debthttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=techdevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=proddevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=markethttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=entdevhttp://smeinfo.com.my/index.php?tpl_id=12&ch=2&pass=scheme&fundtype=hrdev


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Financial AssistanceBy Government Ministry & Agency

MinistryMinistry of Science, Technology and Innovation (MOSTI)AgencyAmanah Ikhtiar Malaysia (AIM)Bank Kerjasama Rakyat Malaysia Berhad (BKRMB)Bank Negara Malaysia (BNM)Bank Pembangunan Malaysia Berhad (BPMB)Agrobank MalaysiaBank Perusahaan Kecil & Sederhana Berhad (SME Bank)Commerce Asset Ventures Sdn. Bhd.

Credit Guarantee Corporation Malaysia Berhad (CGC)ERF Sdn Bhd (ERF)Export-Import Bank Malaysia Berhad (EXIM Bank)Majlis Amanah Rakyat (MARA)Malaysian Biotechnology Corporation Bhd (MBC)Malaysia Debt Ventures Berhad (MDV)
http://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mostihttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=aimhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bkrmbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bnmhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bpmbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bpmhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=smebankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=comhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=cgchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundtype=debt&agency=erfhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=eximbankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=marahttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mbchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mdvhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mdvhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mbchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=marahttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=eximbankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=eximbankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=eximbankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundtype=debt&agency=erfhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=cgchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=comhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=smebankhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bpmhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bpmbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bnmhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=bkrmbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=aimhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mosti


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Financial AssistanceBy Government Ministry & Agency (continued)

Malaysia External Trade Development Corporation (MATRADE)Malaysian Industrial Development Authority (MIDA)Malaysian Technology Development Corporation Sdn Bhd (MTDC)

Malaysian Timber Industry Board (MTIB)Malaysian Venture Capital Management Berhad (MAVCAP)Malaysian Industrial Development Finance Berhad (MIDF)Mayban Ventures Sdn. Bhd.MIMOS Berhad (MIMOS)Multimedia Development Corporation (MDeC)

Perbadanan Nasional Berhad (PNS)Perbadanan Usahawan Nasional Berhad (PUNB)SME Corp. MalaysiaTabung Ekonomi Kumpulan Usaha Niaga (TEKUN)
http://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=matradehttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=midahttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mtdchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mtibhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mavcaphttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=midfhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mayhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mimoshttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mdechttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=pnshttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=punbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=smidechttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=ytnhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=ytnhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=smidechttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=punbhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=pnshttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mdechttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mimoshttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mayhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=midfhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mavcaphttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mtibhttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=mtdchttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=midahttp://smeinfo.com.my/index.php?tpl_id=12&ch=14&pass=scheme&fundagency=matrade


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