World of Malaysian SMEs

Phase one of plan to develop high-growth SMEs launched

2011-05-10T14:07:00.001+08:00

The government recently rolled out the first phase of the master plan for the small- and medium-sized enterprises (SMEs), to stimulate their productivity and innovation levels to match those of a high income nation.

Prime Minister Datuk Seri Najib Razak, in announcing this, said the plan (2011-2020) focuses on developing high-growth SMEs to become home-grown champions that spearhead the economy.

SME competitiveness needs to be developed further not only in the context of SME relations with the global market but also to enable them to compete in the local market in the context of globalisation and liberalisation, he said.

The Asean Free Trade Area and other multilateral agreements make the market more open than before.

Najib said requirements for licences and permits have been relaxed, following the analysis by the World Bank that SMEs here had too many requirements to fulfil in order to operate their businesses.

A pilot study on impact assessment by the World Bank on 15 SME programmes found the productivity level of SMEs in Malaysia was low at RM44,300 per worker - one-third of the large companies (RM143,000 per worker) and also lagged behind other countries.

"It has something to do more or less with corruption. Because of this, we will make obtaining licences and permits easy," he told a media briefing, after chairing the National SME Development Council meeting in Putrajaya.

He said the task will be given to the chief secretary to the government as the chairman of Pemudah (the Special Taskforce to Facilitate Business), who will later submit proposals to the government.

Najib said a "green lane" policy for SME products and services will be introduced to the government as well as government-linked companies.

"The opportunities will be given through central contracts to high-potential SMEs that have highly innovative products based on recommendation by the SME Corp and the Malaysian Technology Development Corp," he said.

Assistance to penetrate the global market is also being considered for those with potential but have failed to win any prizes.

The council also approved the SME Integrated Plan of Action 2011, which encompasses a total of 219 programmes being implemented with a financial commitment of RM5.9 billion in 2011, compared to 226 programmes for a total of RM7.1 billion in 2010.

SME contribution to GDP is expected to increase from 31 per cent in 2010 to 40 per cent by 2020 as value added growth of SMEs continued to outpace the overall economy .

The quantum leap in growth is highly dependent upon a significant increase of 75 per cent in productivity gains of SMEs, added Najib.

As at end February, SME financing outstanding stood at RM130 billion, accounting for 38.3 per cent of total business loan.

Source : Business Times

Act of passion....is it?

2011-05-10T13:36:00.002+08:00

Starting a business is often an act of passion, you want to change the world for a better place, love how it makes you feel to do what you do; in short it is often more than only making money – it’s like finding true love in what you do.

You are probably very good at what you love doing or better, because you love what you are doing, you are very good at it. Being distracted and frustrated, however, makes us less focused and our business suffers.

We often do things we are not good at, because we don’t like or even hate doing them. Business suffers again, i.e. a badly designed web-site, or wrong and unfinished bookkeeping.

Luckily we as people work well in groups, we are not islands. Finding ways of dealing with all the unwanted admin is easier today than ever – use virtual assistant services or business process outsourcing to keep you focused on your ‘true business love’.

Only business focus AND business passion makes for a successful small business.

- Azlan Abu Bakar

How do great entrepreneurs think?

2011-05-10T11:40:00.002+08:00

Here is one interesting study:

That is not to say entrepreneurs don't have goals, only that those goals are broad and–like luggage–may shift during flight. Rather than meticulously segment customers according to potential return, they itch to get to market as quickly and cheaply as possible, a principle Sarasvathy calls affordable loss.

Repeatedly, the entrepreneurs in her study expressed impatience with anything that smacked of extensive planning, particularly traditional market research. (Inc.'s own research backs this up.

One survey of Inc. 500 CEOs found that 60 percent had not written business plans before launching their companies. Just 12 percent had done market research.)

…Sarasvathy explains that entrepreneurs' aversion to market research is symptomatic of a larger lesson they have learned: They do not believe in prediction of any kind. "If you give them data that has to do with the future, they just dismiss it," she says.

"They don't believe the future is predictable…or they don't want to be in a space that is very predictable."

The article is interesting throughout and hat tip goes to The Browser.

by Tyler Cowen (marginalrevolution.com)

Open letter to Former Malaysian Prime Minister Tun Dr Mahathir

2011-01-23T19:25:00.000+08:00

DEAR Dr Mahathir,

Asalaam Alaikum

As a visionary former prime minister, in forcefully addressing the currency crisis and now as a `global ambassador' of Islamic finance, your words carry much weight across the Muslim world. A "keynote-cum-pep rally presentation," as only you can deliver, is needed for Islamic finance to go from cheerleading to leading cheers in the Muslim countries and beyond.

Dr. Mahathir, some of your recent comments about Islamic finance are ahead of our time. Yes, Islamic finance may be seen as superior model to conventional finance and after a few more decades of operation, say, by 2030, will prove that you are right.

And it may also provide an opportunity for Muslim countries, all of them either frontiers or emerging markets, to become developed nations by financing real underlying assets contributing to gross domestidc product (GDP), from agriculture to industrial to service sector.

But, today's Islamic finance is risk averse (Murabaha accounting for up to 85 per cent) and about bankable Muslims with nominal exposure to micro-finance, small and medium enterprise (SME) financing or venture capital, areas that contribute to financing/building knowledge base economies. The size of many Islamic banks is a rounding error or size of a transaction in the conventional space.

There is saying, a chain is only as strong as its weakest link, for Islamic banks, subset of Islamic financing, it is their lack of size. Many Islamic banks are privately held, have small free float and their paid up capital is under US$500 million (RM1.53 billion). Yes, an Islamic mega bank, allowing for important functions like market making of Islamic instruments, will be a reality in Malaysia in 2011.

However, a newly licensed Malaysian Islamic mega bank is not the only route to 'size matters' banking environment. Today, the small Islamic banks are fragmented in overbanked markets, like the United Arab Emirates and Malaysia, and comments on consolidation will resonate when the source, like yourself, Dr Mahathir, having a proven track record, respect, and recognition as former leader of a country that is a leader in Islamic finance.

Consolidation

Dr Mahathir, Malaysia, as a table setter for Islamic finance, initially needs to look inward towards its overbanked Islamic banks and seriously think about "consolidation-cum-megabank." The Malaysian Islamic banking subsidiaries, having spent enough time to grow and develop under their parent banking holding company, should be encouraged to merge, as part of the Economic Transformation Plan (ETP).

From the Pemandu website, on where we are today, "? the [financial] sector faces critical challenges, including lack of scale, lack of liquidity and diversity in the capital markets, low levels of financial literacy and competition from regional financial centres such as Singapore, Hong Kong and increasingly Indonesia".

Additionally, Malaysian bank holding companies should be encouraged to spin off their Islamic subs and list on Bursa Malaysia, hence, adding additional depth with syariah-based companies. As public listed, it opens up opportunities for (1) syariah-based indices, (2) stock options as part of compensation for attracting and retaining, (3) start process of Islamic shareholder activism, (4) acquisition currency, and so on.

Yes, there will be challenges, from desire to stay independent, especially for market share leaders, to political sensitivities to citing studies that mergers in the financial sector do not obtain the projected strategic efficiencies and so on. But, we have an example in Pakistan of two Islamic banks merging, Al Baraka Islamic Bank and Emirates Global Islamic Bank, to obtain strategic and financial efficiencies.

Size, especially horizontal mergers of commercial banks, allows for greater economies of scale, efficient use of distribution channels, better cost management, and ability to offer those products that are a function of size: project finance, debt underwriting, market making (all of which require a balance sheet).

Size also opens up many macro objectives of Islamic finance, like financially empowering Muslims, Organisation of Islamic Conference (OIC) countries and cross sell of Islamic finance, and sets an example for the fragmented Gulf Cooperation Council (GCC) market.

A mega Islamic bank needs to compete with the likes of CitiBank, HSBC, Standard Chartered, JP Morgan Chase, etc, and not their windows and subsidiaries for mega projects, advisory, underwriting, etc, in OIC and G20 countries. It is here and at this stage, where your comments about Islamic finance being a superior model and contributing to development of Muslim countries, etc, will be confirmed.

Existing situation

Dr Mahathir, today, Islamic finance is starting from a low base, 25 out the 57 OIC countries have some sort exposure, from nominal to established. Beyond the smaller reach, Islamic bank penetration, as a per centage of overall banking assets, is also at a low base, averaging 12 per cent. Chart 1 shows a sample of OIC countries and market penetration.

At best, Islamic finance has reached 2 per cent to 3 per cent of the 1.6 billion Muslims, and, yet, the often ignored US$640 billion (RM1.96 trillion) Halal industry has not only better awareness and acceptance, but much greater market penetration.

Today, Muslim countries' GDP, except Turkey's and Indonesia's, are smaller than large capitalised listed companies in the West. For example, Malaysia's GDP for 2009, was about US$193 billion (RM591 billion), equal to the market capitalisation of Google. Table 1 shows Top 10 OIC countries GDP (World Bank) to the market capitalisation of the 10 largest companies in the S&P BMI Global index.

Thus, the litmus test is twofold: First, If I'm an emerging market (Islamic) asset manager in the Gulf or EU/US and I want to invest in publicly listed (market share leaders) in Islamic banks (and not in their funds) where do I go? Is Bank Islam my preferred option over Dubai Islamic Bank, Kuwait Finance House or Al Rajhi?

Second, if I'm a Fortune 50 company and I want to retain a large balance sheet Islamic bank to expand my sources for efficiently raising capital, advisory, and distribution for US$1 billion to US$5 billion (RM3.07 billion to RM15.3 billion) sukuk or syndicated loans, where do I go?

Does Malaysia have the will and vision to be that one-stop destination answer today?

Thank you, Wasalaam and kind personal regards.

* The writer is ThomsonReuters' Global Head of Islamic Finance based in New York

Global halal SME report and directory out in April

2011-01-23T19:22:00.000+08:00

AN International Halal Small and Medium Enterprise (SME) report and directory will be published for the first time in April this year.

The report will offer both industry analysis and listing in a single package and will also include online and mobile platforms to maximise reach.

To be published by Malaysian Halal media company, H Media, the report will include five key halal industry segments including agriculture; manufacturing; tourism; services and finance.

"Our aim is to provide a definitive guide for businesses to navigate the lucrative yet highly complex global halal market," said Kamarul Aznam Kamaruzaman, managing editor of H Media.

The 200 plus page-book in full colour also has several key features such as over 30 choice reports documenting the industry's most significant developments throughout the year and featuring industrial and geographical sectorial reports across entire halal value chain.

There is also a comprehensive directory featuring over 2,000 premium halal certified companies from all over the world.

The book which is limited to only 10,000 copies can be obtained at Mihas the world's largest Halal-only trade show, or via Individual and corporate subscriptions and at Halal conferences, exhibitions, forums and related events.

Right track, wrong train?

2011-01-23T19:15:00.000+08:00

THE year 2010 was a year of "headwinds" for Islamic finance, and the last article of the year was a survey on issues that merit more airplay and public comment. There were so many interesting stories in Islamic finance; some good (announcement of IILM Corp), some bad (Investment Dar using syariah defence), and some ugly (anti-syariah movement).

This is not meant to be a scientific survey, but more of dialogue to answer the bigger question: Are we getting closer to where we should be in Islamic finance?

Some of the questions are straight forward, some tongue in cheek, and some requiring a deeper dive for future articles. I've included my answers at the end.

Question 1. Best source for insights into Islamic finance?

A. Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz's speeches on Islamic finance over the years on the central bank's website.

B. Islamic finance blogs.

C. Surveys and reports from the management consulting firms.

D. News coverage from major Western media.

Question 2. For Islamic finance, 2010 may be best described as year of:

A. Regrouping and reflection.

B. Excellence and expansion.

C. Sukuk, scholars and shortcomings.

D. More cheerleading about Islamic finance.

Question 3. The Islamic finance highlight for 2010 was:

A. IILM Corp announcement to address short-term liquidity issues.

B. Investment Dar's Syariah Board pushing back management on the "syariah defence" to void a contract obligation.

C. Sukuk defaulting, as will result in better documentation and (possibly) pricing.

D. Comments from AAOIFI's secretary-general Mohd Nedal Al Chaar concerning restricting scholars serving on multiple boards and equity interest in consulting firm.

E. Combination of sukuk from Turkey and London, Islamic banks in Senegal and Maldives.

F. Restructuring and review of business model of Gulf Finance House, ArCapita, and other real estate oriented Islamic banks.

G. No developments of significance, but continued IB (Insha'allah Banking).

Question 4. Should there be an Islamic finance award for a category with different winners from different conference organisers?

A. Yes, a grand winner (see where this going?).

B. No, awards have lost their impact because of too many awards and transparency issues.

C. Move to the next question and give everyone an Islamic finance award.

Question 5. Should there be an award for the most accessible syariah scholar?

A. Yes, as it shows the ideal number of boards to sit on.

B. No, as he/she will become in demand and then inaccessible.

Question 6. Today, marketing of Islamic banking is only about reaching out to Muslims?

A. No, Islamic finance is for everyone.

B. Yes, because:

* Marketing materials conspicuously emphasise compliance with syariah;

* Names of syariah scholars prominently displayed;

* Advertising on Muslim/Islamic magazines, websites, blogs, etc; and

* Sponsoring Islamic finance events.

Question 7. Islamic finance needs to reach out new channels, like social media, to reach their bankable customers?

A. No, existing channels have not been properly and completely utilised.

B. Yes, as there is a buzz about Islamic finance globally, we need to focus on reach over breadth.

C. Unsure, is the potential target market wired for accessibility?

Question 8. Islamic finance needs to pay immediate attention to:

A. Retail penetration of takaful.

B. More resources towards micro-finance and SME financing.

C. Building out Islamic asset classes.

D. Trading platform for Islamic treasury instruments and sukuk.

E. Delinking from the London Interbank Offered Rate.

F. Islamic Alternative Dispute Resolution Centre.

G. Building bridges to the US$640 billion halal industry.

Question 9. What is the biggest threat/risk to future of Islamic finance?

A. Anti-syariah movement in the West/G20 countries.

B. Syariah-compliant risk, too few scholars sitting on too many boards and not enough time for document due diligence, which is now measured in pounds and not pages.

C. Regulatory arbitrage

D. Too many small-capitalised Islamic banks.

E. Top management of Islamic banks doesn't have vision and strategy, as merely replicating conventional products with Islamic wrappers for fees.

Question 10. Today, what are the systemic risks to Islamic finance?

A. Exposure to continued one/two sectors, like real estate as part of the real economy, without ability to securitise.

B. A depositor run on Islamic bank(s) due to confidence/liquidity crisis, scandal, etc.

C. There are too many small-capitalised retail focused Islamic banks/subs in, say, places like Malaysia or the United Arab Emirates, resulting in destructive competition.

Question 11. Research is needed immediately on:

A. Stress testing deposit taking Islamic banks.

B. Economic/financial indicators for measuring pulse of Islamic finance.

C. Syariah-based Islamic finance

Question 12. In 2011, stock exchange contribution to development of Islamic finance will be from:

A. Dubai Financial Market, world's first Islamic stock exchange.

B. Bursa Malaysia.

C. Istanbul Stock Exchange.

D. London Stock Exchange.

E. Luxembourg Stock Exchange.

F. Tadawul (Saudi Arabia).

Question 13. In 2010, the world recognised Malaysia as a standard bearer for Islamic finance, for 2011:

A. More Gulf-based entities will raise money in Malaysia, via sukuk and bonds

B. Malaysian Islamic subsidiaries will be spun off into public-listed companies, resulting in increased portfolio investment from global Islamic investors.

C. Domestically, Islamic bank consolidation will start to take place, either through mergers and acquisitions or central bank raising paid-up capital requirement.

D. IILM Corp will issue first Islamic paper.

E. Nothing meaningful in Islamic finance will take place in 2011 in Malaysia.

Question 14. Qatar's victory in hosting the 2022 Fifa World Cup finals will mean:

A. Malaysian IFIs, contractors, and halal industry will make aggressive bids.

B. The PM, as part of his vision for Malaysia, as eventually a Group of 20 country, leader for Organisation of Islamic Conference countries, and responsible/integrated global citizen, will convene a committee about a future Fifa hosting bid for Malaysia.

C. Malaysia will take a wait and see approach to do something.

Answers: 1. A, 2. C, 3. B, 4. C. 5. A, 6. B, 7. B, 8. A/B, 9. B/D, 10. B, 11. A, 12. B/E, 13. A/D, 14. C.

The writer is global head of Islamic finance for ThomsonReuters based in New York

Malaysian SMEs a resilient lot

2011-01-23T19:04:00.000+08:00

THE domestic small and medium enterprise (SME) sector has proven its resilience during the recent global financial crisis by registering consistent double-digit quarterly growth, SME Corp Malaysia chief executive officer Datuk Hafsah Hashim said.

She said SME Corp's quarterly survey on the local SMEs revealed that the average growth of the sector in the first nine months this year is about 17 per cent.

The first quarter saw the sector registering 13 per cent growth in sales, followed by 20.9 per cent and 16.7 per cent growth in the second and third quarter, respectively.

"We would expect the full-year growth to hover around 15 to 17 per cent," she said after announcing the top 10 companies in the Enterprise 50 (E50) Award 2010 in Kuala Lumpur last month.

Every year, E50 recognises 50 high potential Malaysian SMEs that are well-positioned for the future, while at the same time, promote greater excellence among local enterprises.

The programme, which has entered its 14th year, received 107 nominations from various industries. These companies have a combined net turnover of RM783.5 million, about a third more than the RM597.2 million combined sales of 95 companies participated in 2009.

The E50 programme serves as an excellent platform for Malaysian SMEs to develop their potential and grow to become as good as their global counterparts.

These awards highlight the importance of recognising SMEs as engines of growth for the Malaysian economy, and the high calibre of the winning SMEs demonstrates their competitive strength in this sector.

The 50 winners were selected based on qualitative and quantitative analysis. During the quantitative analysis, focus was placed on the company's financial performance, particularly on their liquidity and leverage ratios.

Qualitative aspects such as internal and external strategy, asset efficiency, expectations, and resource alignment were evaluated.

Once the scores were tabulated, the results were presented to an independent panel of judges who finalised the ranking.

Swift Energy Sdn Bhd ranked first, followed by SNS Network (M) Sdn Bhd and iDimension MSC Sdn Bhd. Others in the top 10 are Natural Health Farm Marketing (M) Sdn Bhd, Amlex Technology Sdn Bhd, UTS Technology Sdn Bhd, Myagri Eco-Biosciences Sdn Bhd, White Café Sdn Bhd, Gunung Rapat Hiong Piah Sdn Bhd and Cliff Ink Sdn Bhd.

The E50 award is jointly organised by SME Corp and Deloitte Malaysia, with the support from RHB Bank Bhd, Telekom Malaysia Bhd, Celcom Axiata Bhd, Business Times, Media Prima Bhd and Malaysia SME.

CIMB eyes double-digit growth in SME loans

2010-09-30T18:51:00.000+08:00

CIMB Group Holdings Bhd, which is implementing a transformation programme in its small and medium enterprise (SME) segment, is targeting double-digit growth in SME loans next year, a reverse from the yearly contraction in the past four years.

The bank, which currently has about 9 per cent market share in SME loans, expects to grow the share to "low- to mid-teens in the next couple of years".

Group chief executive Datuk Seri Nazir Razak said in the first phase of the transformation, the bank focused more on repairing asset quality than growing the asset.

He said CIMB used to have high non-performing loans (NPLs) in the SME sector, of almost 20 per cent.

"Now, it is no longer a problem because the NPL ratio has dropped sharply, we have also strengthened the credit process (and) now we are ready for Phase Two of the transformation.

"I think in 2011, we will be looking at a double-digit loan growth in the SME sector, from the contraction of 5 to 6 per cent over the last four years," Nazir told a news conference after the launch of SME Solutions Expo 2010 by Deputy Domestic Trade, Cooperatives and Consumerism Minister Datuk Rohani Abdul Karim in Kuala Lumpur.

SME loans account for about 15 per cent of CIMB's loan book. Nazir said the NPLs for its SME segment has dropped to 3 per cent.

In the first half of this year, CIMB Bank registered slower contraction in SME loans and a turnaround is anticipated by year-end.

The second phase of the bank's transformation includes better customer engagement, strengthening of the product suite, specialised lending programmes and decentralisation that allows small businesses to apply loans from CIMB branches.

"So, through various initiatives, we are quite confident that in 2011, our SME loans can grow quite rapidly," he said.

Nazir said CIMB, which has presence in eight out of 10 Asean countries, had established regional desks.

He said since the desk was launched six months ago, more customers from Thailand have sought the service as they are interested to set up businesses in Indonesia.

Nazir called on local SMEs to take advantage of the economic growth potential in Indonesia by utilising CIMB's expertise in the regional markets.

Meanwhile, Rohani said in the coming one year, the ministry will be organising a series of roadshows to promote Made-in-Malaysia products.

The roadshows are aimed at bridging the supply by thousands of SMEs in the country and the untapped demand from neighbouring countries.

She urged SMEs to participate in the programmes organised by the ministry, including franchise, direct-selling and SME initiatives.

Source: Business Times

Manufacturing Outsourcing in Malaysia

2010-08-04T16:33:00.001+08:00

The inflows of foreign direct investments in the manufacturing sector over the last four decades has resulted in the growth and development of many Malaysian engineering companies with acquired and grown expertise ina variety of sectors.

The accumulated wealth of experience and technology have created companies that are currently global players in their own right.

These companies have become reliable suppliers to foreign companies operating in the country and have also carved a niche for themselves globally.

Malaysian companies have been recognised internationally for their capabilities and quality production in a diverse range of engineering activities, particularly in machining and fabrication.

The wide range of supporting companies with more than 30 years experience are able to meet the stringent demands of OEMs and their requirements for parts and components and precision engineering services.

The existing capabilities in sourcing parts, components and services in Malaysia include more than a thousand engineering supporting companies in mould and die, metal casting, machining, metal stamping, surface engineering, heat treatment as well as metal fabrication.

Added to that is the existence of more than 60 semiconductor companiesthat specialise in silicon wafer, wafer fabrication, integrated circuitpackaging and testing, as well as design houses. There are also more than 300 electronics component manufacturers focusing on printed circuit boards (PCBs), printed circuit board assembly (PCBA), LED, capacitors and resistors.

Malaysia's expertise in precision plastics and rubber components is translated into more than 600 companies equipped in those areas.

As manufacturing in the global scenario become more and more competitive, major manufacturers are looking for total solution or manufacturing solution providers and global suppliers who will manage the smaller components, parts and services suppliers.

As the global outsourcing market is expected to grow rapidly in the coming decade, Malaysia needs to have in place many more total solution or manufacturing solution providers to secure a larger share of the global market demand.

A study by Frost & Sullivan reported that the market size for the global machinery and equipment (M&E) in 2009 was estimated at US$370 billion (RM1.295 trillion), and according to industry sources, 20 to 30 per cent of manufacturing requirements are outsourced.

While companies in the engineering supporting industry are realigning themselves to provide multiple or total engineering services, the government is also intensifying efforts to encourage major players in the outsourcing activities in the country to transform themselves into high-end solution providers.

This transformation will enable companies to provide a cost competitive packaged services from product conception andR&D to serial production and if required, management of entire processes including logistics, packaging, testing and certification.

Moving up the manufacturing chain

2010-08-04T16:24:00.002+08:00

ACCORDING to the recently released 10th Malaysia Plan, Malaysia needs to achieve an average six per cent annual gross domestic product growth in the next five years to achieve the required development toward a high income economy by 2020.

The newly formulated New Economic Model which is based on innovation, creativity and high value sources of growth is intended to shift the country's reliance from a manufacturing base dependent on semi- skilled and low cost labour to one that focuses on high technology dependent upon skilled and highly paid workers, among others.

Considering the competitive global landscape that exists, Malaysia would do well to further diversify its income stream by venturing into markets that will help the country sustain recovery after the credit crisis.

Manufacturing outsourcing is not a new trend, with developed countries outsourcing manufacturing jobs to neighbouring developing nations, sometimes even setting up factories in the country.

However, as the world recovers from the 2008 financial upheaval, original equipment manufacturers are increasingly outsourcing their requirements for parts and components, and modules.

Increases in demand and costs of production will necessitate further outsourcing of assembly, and testing and calibration operations by original equipment manufacturer (OEM) companies.

SME Corp, MDec link up to enhance online sales

2010-08-04T16:21:00.003+08:00

SME Corp Malaysia and Multimedia Development Corp (MDec) are training small companies to carry out online sales to grow their business in a joint programme which started in July.

This is to address concerns that online transactions are not safe, which is the main reason why small and medium enterprises (SMEs) use the Web to just display their goods.

The programme has 100 pre-subscribers now and they aim to have 2,000 SMEs by the end of July next year.

"Some of the firms already have a Web presence but through this platform, they can expand their export and revenue operations beyond their traditional direct buyers market.

"The goal in the long term is to link the Malaysian platform with international SMEs platform," MDec chief executive officer Datuk Badlisham Ghazali said.

According to SME Corp chief executive officer Datuk Hafsah Hashim, 92 per cent of SMEs have Internet access.

"There is always the perceived notion that online financial transactions are not secure and if they dispel those negative perceptions, the world is their market," said Hafsah.

The training is targeted for industries like retail, manufacturing, healthcare and logistics.

SME Corp and MDec plan to target SMEs to join the programme through 14 outreach programmes, using Internet technology platforms and reaching outto trade associations in educating and highlighting this to their members.

Participants will be paying RM10 a month for a year, after which thefees will rise. They will receive both training and technical support, including four hours of training to prepare and upload their products into the online selling platform.

Incentives to make them champions at all levels

2010-08-04T16:08:00.001+08:00

THE government will unlock the growth and innovation potential of small-and medium-scale enterprises (SMEs) over the 10MP period to create domestic, regional and global champions.

It will reduce the regulatory costs borne by SMEs, build capacity and capabilities of SMEs, support the creation of an entrepreneurial culture, strengthen support systems and improve access to financing for SMEs.

SME Corp Malaysia will deliver the SME development targets. It will coordinate programmes, including funding offered by ministries and agencies, to reduce redundancy and inefficiency as well as track and assess the impact of the programmes.

It will report annually to the National SME Development Council chaired by the prime minister.

The government will exempt some of the more costly business regulations for companies employing five or fewer people until the company expands beyond five employees.

Regulations will be eased for these companies in registration of business and employment requirements.

To build capacity and capability, the government will introduce programmes such as multinational corporations/large company training, skills training programmes, medium-term industry training schemes and leverage on training resources abroad.

MNCs/large company training will see SME employees who supply products and services to MNCs given training to upgrade their knowledge and skills.

Skills training courses will cover management, finance, marketing and ICT application.

Source: Business Times

Sell it with Google

2010-05-18T22:29:00.001+08:00

HAVING a Web presence can help push your products, and Google has a host of tools to get you started.

All you need to do is launch the browser, go to the Google Search page and search for "AdWords".

With AdWords, you can place banner ads to tell consumers about your products. It doesn't matter if you're a mum selling cupcakes using blogspot, or a business with 50 employees working in three offices.

"Using AdWords, you get to create ads and choose keywords that consumers can quickly relate to your product.

Your ad will appear next to the search result, but you only need to pay if they click on your ad," said Julian Persaud, Google's managing director Southeast Asia.

When using AdWords, business or ad owners need to think like the consumer.

"Online marketing is a way for businesses to communicate directly to consumers," reminded Persaud.

He said Malaysia is an exciting market for Google, especially with the recent announcement of the National Broadband Initiative.

The latest figures from the Malaysian Communications and Multimedia Commission show that national Internet penetration stands at 66 per cent, with 17 million Internet users.

But in terms of online advertising, Malaysia is still in the initial stages.

The Nielsen 2010 report shows that last year's online media spending was RM40 million, only about one per cent of total advertising spending.

What's more, there are 600,000 small and medium-sized enterprises in the country, but only 100,000 have websites.

"Many businesses think if you place your ad online, you have to enable purchasing online, but that's not true.

"Many consumers research for products and services and do their purchases offline," said Persaud, pointing out that 83 per cent of digital lifestyle consumers here used the Internet during the purchase process while 75 per cent used search engines to research for their products.

He added: "People want to be able to search for the products and services they want, and businesses can list their business for free on Google."

Last year, together with the International Trade and Industry Ministry, Google held the SME Business Stimulus campaign where businesses received RM200 worth of AdWords credit to launch and maintain their website.

ends

SME Corp tightens funding system

2010-05-18T22:15:00.003+08:00

SME Corp Malaysia has suspended all grants indefinitely as it restructures funding facilities to stop abuses in the system.

Grants under SME Corp will not be renewed even in the 10th Malaysia Plan period, its chief executive officer Datuk Hafsah Hashim said.

The corporation has been disbursing grants to budding small and medium enterprises (SMEs) for the last 13 years and it stopped doing so since December after all allocations were used up.

Last year, SME Corp was allocated some RM300 million by the government. The allocation for this year was reduced to only RM24 million.

"From now on we plan to offer soft loans through the Malaysian Industrial Finance Bhd with low interest rates of 4 per cent," she told Business Times .

"With the loans, people will be more serious as we will provide loans to serious businessmen as we need their commitment as well.

The loans will finance 85 per cent of the project while the rest will be put in by the businessmen themselves.

"You look at other countries such as India, Indonesia and Philippines, that's the order of the day. We are phasing out the grants to loans and to intensify good paymasters. We don't want rent seekers who get it easy and then they are gone," she added.

She said although there will be no more grants, the government is mulling over giving out rebates to good paymasters.

"If they are good paymasters we may turn their loans into interest-free facilities after they have serviced it for five years and above without problems or either give them a rebate of at least 20 per cent from the loan if the payment is consistent and the loans are about to finish.

But nothing is finalised yet, it's all work in progress," she said.

Hafsah added there will be a new mechanism of financial assistance given on programme basis whereby SME Corp will organise training and seminars for companies to benefit from, especially in the areas of innovation, branding and packaging.

She said although the grants recipients were monitored upon receiving the money, they found that many SMEs were resorting to consultants when applying for the loans, resulting in them (the consultants) receiving a cut once the grant was approved.

Since its inception in 1996, SME Corp has given out RM516.4 million in grants and RM683.6 million loans through MIDF.

The highest grant offered by the corporation is a matching grant worth RM500,000 for technology while the lowest grant offered is RM50,000 for advertising and promotion.

"For the whole duration the RM500,000 grant was offered, less than 20 companies successfully managed to obtain it," she said.

Hafsah said the rationale behind changing grants into loans was also because soft loans are able to provide a better multiplying effect than grants as more companies can benefit from it.

"Right now we have always had money coming in from the government and once we give it out, there is nothing left.

"With this change, we will be able to roll the money and help more companies," she said.

Grooming Malaysian SMEs into big entities

2010-05-18T21:31:00.004+08:00

FOURTEEN years ago, the Small and Medium Industries Development Corporation (Smidec) was established.

The government recognised that small and medium scale enterprises (SMEs) play a vital role in growing and deepening the nation's economic and social development.

Its primary aim was to develop capable and resilient Malaysian SMEs that could compete in an expanding global environment.

The establishment of the National SME Development Council (NDSC) in 2004 cemented the government's commitment towards the SME sector.

This agency had the task of defining and developing policy that would not only better prepare but that would take Malaysian SMEs to a different level altogether.

In 2007, the NSDC appointed an agency that will single handedly formulate policies and strategies.

Some of these initiatives would include programmes that cut across all ministries and government agencies.

Therefore, the birth of SME Corp Malaysia. The government has developed an extensive array of measures to support the growth and development of SMEs.

For example, SMEs could benefit from the government's 15 per cent discount of fees for the incorporation of new companies, whose authorised share capital is less than RM1 million.

The department of Domestic Trade and Cooperative and Consumerism figures show that 95 per cent of approximately 40,000 new SMEs benefited from this discount.

All this in just three years. The Companies Commission of Malaysia (SSM) focus on SMEs bodes well with the nation's aspiration to increase the formation of new companies.

The fact is that there are over 500,000 SMEs in Malaysia which provide employment opportunities for over 56 per cent of the total workforce.

And the cherry on the cake is that it contributes to a healthy 37 per cent to Malaysia's gross domestic product (GDP).

Impressive to say the least, these figures demonstrate how this is a key growth sector, one that has the potential to increase its yield and prominence in the global market in a very short time.

It is widely recognised that SME activities tend to be more labour-intensive than those of larger businesses, their contribution to employment generation and poverty reduction is significant.

Economists are quick to point out that SMEs play a major role in a nation's economy by serving as the link between big and small businesses.

They help absorb the productive resources of an economy by forming flexible systems that provide goods, services and products that help build bridges to other industries.

These links ultimately form tributaries and develop extensive supply chains that countries can tap into as industrialisation is broadened and as businesses begin to proactively engage in sophisticated economic activities.

SMEs are also largely entrepreneur-driven, and they operate with efficiencies not normally seen in larger business entities.

They are efficient in the way they allocate their resources and are responsive enough to make quick adjustments.

While big businesses are often credited with the creation of new products and process, these owner-run businesses are known for their agility, cutting-edge innovation and creativity.

The government is committed to supporting the growth and expansion of SMEs. The prime minister chairs the National SME Development Council, the apex body that looks after all matters concerning SMEs.

At Miti, the principal agencies supporting SME work are the SME Corporation, SME Bank and the entrepreneurship division of the ministry.

Together, they provide a wide range of services to help SMEs, improving the quality of products and levels of productivity, upgrading skill sets and preparing local realities for a competitive global context.

A programme called "Groom Big" is a testament of the government's seriousness in engaging, nurturing, and grooming the SMEs.

Its aim is to make SMEs think big so that they can be groomed into large entities.

There are eight development modules in the Groom Big programme which focus on basic quality improvement and labelling, quality systems, certification such as hazard analysis and critical control point (HACCP) and good hygenic practices (GHP), value engineering, packaging and branding, productivity improvement and process optimisation, product development and halal.

At the end of the modules, the SMEs are perceived to be export-ready to compete in the global challenge.

Overall, it can be said that there is now a comprehensive range of services to help entrepreneurs start up, grow and expand their businesses.

These services are being continuously upgraded and expanded. The government's priority now is to ensure that SMEs that need assistance are aware of these services and are able to access them.

In this regard, out reach programmes are a critical part of the work of all the participating support agencies.

Some of them have established branch offices in different parts of the country to widen their reach.

An active calendar of trade fairs, exhibitions, conferences, workshops and seminars held throughout the country also helps to build awareness of the available assistance.

The goal is always to try and match needs with resources. However, the government's action cannot be sufficient to build and shore up the SME community.

What we need now is the entrepreneurial capacity, the motivation, drive and skill of Malaysia's entrepreneurs to identify viable business opportunities and take advantage of it - carpe diem or"seize the day".

Where such talent is exhibited, and support is needed to help a business grow, the resources of the government will always be ready to provide the necessary boost.

* Tan Sri Abdul Rahman Mamat is the secretary-general of the Ministry of International Trade and Industry - This article was published in Business Times (NST) on 26 April 2010.

SMEs assured of continuous govt support

2010-05-18T21:25:00.003+08:00

SMALL and medium enterprises (SMEs) will constantly be supported as they are one of the country's key economic growth drivers, said Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan.
However, local SMEs need to make bold changes if they are to play their role effectively in helping develop the domestic economy, he said.
"SMEs are a catalyst for the implementation of the recently announced New Economic Model. The dependence on the government, political patronage and rent-seeking mentality should have been erased from the local SMEs dictionary.
"The NEM is opening new opportunities for our SMEs to explore." Jacob noted that SMEs contributed 56 per cent of total employment in the country and accounted for more than 90 per cent of about three million businesses registered with the Companies Commission of Malaysia.
"These companies are expected to contribute 37 per cent of our gross domestic product this year compared with 32 per cent last year."
He said the facts and figures reflected the positive development of SMEs over the past five decades.

Source : NST

Mobile gallery to assist SMEs

2010-05-18T21:18:00.002+08:00

FOR many years, the government had wanted small businesses, especially those in rural areas, to come and learn how to improve the packaging and branding of their products.

Not many did.

So the government is now taking matters into its own hands and going to the small and medium enterprises (SMEs) instead.

SME Corp Malaysia and LimKokWing University of Creative Technology(LUCT) will do this by creating a mobile gallery to help teach the SMEs.

Essentially, the mobile gallery is a bus, refurbished at a cost of RM120,000 and fitted with display packaging samples and materials.

It showcases the old way of packaging and gives SMEs an idea of how to transform and produce innovative packaging.

There is also a discussion area for SMEs to consult officers on duty.

The idea for the strategic partnership resulted from a recent initiative called the "SME Brand Development Programme" initiated during the 7th National SME Development Council meeting chaired by Malaysia Prime Minister Datuk Seri Najib Razak.

"The mobile gallery is in line with the government's effort to develop innovative and creative local brands in assisting SMEs to penetrate a wider market, both local and international," SME Corp chief executive officer Datuk Hafsah Hashim said.

SME Corp chairman Datuk Ir Dr Mohamed Al Amin Abdul Majid said the service provided through the mobile gallery is further extended to a training programme at the Brand Innovation Centre located at LUCT.

"SMEs can engage LUCT to review their entire branding initiative and identify areas which need improvement," he said.

The mobile gallery bus will travel to 20 locations such as Jempol in Negri Sembilan, Pekan and Temerloh in Pahang throughout 2010. The agency hopes to have up to five buses for the initiative by year-end.

Source: Business Times

SMEs get a launch pad for global ambitions

2010-04-05T01:03:00.003+08:00

A master plan for the years 2011 to 2020 will be developed to synchronise small- and medium-sized enterprise (SME) development with the new economic model, the prime minister said.

Datuk Seri Najib Razak said the master plan would create an ecosystem that facilitated the development of SMEs from all aspects, includingfunding, capacity-building and logistical support.

"The aim is to help SMEs grow from small successful local companies to regional and global levels," he said.

The master plan will propose measures for SMEs to make a quantum leap in performance and for Malaysia to produce domestic, regional and global champions that can spearhead the country's economic growth.

The SME contribution to gross domestic product remained flat at 29 per cent from 2000 until 2004 but rose from 29.4 per cent in 2005 to 31.4 per cent in 2008.

"We've seen that the service sector is the sector that is most progressive in terms of SME development.

"We also want to focus on other sectors such as agriculture and manufacturing under the master plan," said Najib.

He added that stakeholders and other parties were being consulted to redefine the SME. The council had approved the setting up of a special unit responsible for SMEs at relevant agencies and ministries using available resources to enhance effectiveness, coordination and monitoring SME development initiatives.

The council also encouraged all ministries and agencies to adopt the SME Competitive Rating for Enhancement (SCORE) to monitor SMEs in their programmes.

Under the Integrated Action Plan 2009/2010, 354 programmes will be implemented this year with financial commitments totalling RM6.02 billion.

MyCoID to expedite business start-ups

2010-04-05T00:52:00.003+08:00

STARTING a business in Malaysia will be made a lot easier with the introduction of the Malaysian Corporate Identity Number (MyCoID).

The new initiative will cut the time it takes to start up a business in Malaysia to just three days from eleven now, as per World Bank standards, Prime Minister Datuk Seri Najib Razak said.

He said MyCoID is another step forward to help raise Malaysia's ranking in World Bank's annual Doing Business report.

The report takes into consideration the ease of doing business in each country.

MyCoID refers to the company serial number that is assigned by the Companies Commission of Malaysia (CCM).

This will now be the single corporate identity number used by various government agencies for reference, registrations and transactions.

It is currently used by five agencies, namely the Inland Revenue Board, Employees Provident Fund, Human Resouces Development Fund, Social Security Organisation and SME Corp Malaysia, but will later expand to include more.

The MyCoID concept effectively phases out and eliminates the various serial numbers assigned by such agencies.

"It will increase government efficiency, without adding to its complexity," Najib remarked. He said the government had approved additional funds of RM4.5 million for the Ministry of Domestic Trade, Cooperatives and Consumerism to set up a MyCoID "gateway" at the CCM that would allow simultaneous registrations with the five government agencies.

The gateway is expected to be set up by the end of this year, he said.

"We have achieved one hour for business registration, one day for company registration, (and) now we want to move towards achieving three days to start a business," he said.

Najib said he was heartened to see that there was a 16 per cent increase in the number of business registrations last year to 312,581, despite the sluggish global environment.

There was only a marginal 0.05 per cent drop in the incorporation of local companies to 41,578, he added, pointing out that this was still "stable".

Tie-up paves way for more SMEs to use online trading

2010-04-05T00:46:00.002+08:00

ONLY a fifth of small and medium enterprises (SMEs) in the country are export players, but more companies are expected to conduct online trading globally with the partnership between SME Corp Malaysia Bhd and e-commerce facilitators eBay and PayPal.

SME Corp Malaysia Bhd chief executive officer Datuk Hafsah Hashim said a 2009 survey by the Multimedia Development Corp found that 92 per cent of local SMEs have Internet access, of which 53 per cent have Web pages.

"Of this 53 per cent, only 3 per cent use e-commerce portal in their businesses. "There is a lot of potential to increase e-commerce activities among the SMEs by using eBay (marketplace) and PayPal (payment platform)," she said.

The study found that high costs, lack of facilities and skills were seen as barriers for SMEs to conduct business online.

The lack of trust in Internet security was also cited as a factor. Hafsah said some of the SMEs do conduct sales online but when it comes to payment, they would do it offline.

She said a series of seminars organised by eBay and PayPal will be conducted for SMEs throughout the country.

Hafsah said by year-end, SME Corp would be able to see the outcome ofthe initiative in terms of e-commerce adoption by the local SMEs.

eBay chief operating officer Oliver Hua said incentives for Malaysian SMEs include a waiver on insertion fees for the first 100 eBay listings and selected features; and up to 25 per cent discount on fees for the first 100 payments received via PayPal.

He noted the huge opportunities for e-commerce in Malaysia, with 15.8million Internet users and e-commerce growing by 28 per cent last year.

He said the global economic downturn has seen Malaysia's export contracting significantly, but customers in the Western countries are looking for value products from Asia. Hua said Malaysia is the most active export markets in Southeast Asia for eBay, and the total value of goods sold to markets like the US or Europe by Malaysian sellers grew nearly 70 per cent last year.

Tunas Mekar, an innovative model

2010-02-18T16:38:00.002+08:00

THE Tunas Mekar Project, an initiative of former prime minister Tun Abdullah Ahmad Badawi, is a smart partnership arrangement between Bumiputera graduates and SME entrepreneurs.

Its two main objectives are to improve the performance of small and medium-sized enterprises and to expose graduates, especially those from Universiti Teknologi MARA (UiTM), to the world of entrepreneurship.

"Graduates are placed with SMEs as apprentices for one year, where they will learn new management techniques.

At the same time, they will gain valuable hands-on experiences that will help them later on in their own businesses," said project director Prof Madya Sodri Ariffin.

"During the internship, they are also paid a monthly allowance of RM800, with the entrepreneurs also providing accommodation or allowances."

"A lecturer from UiTM is also appointed as counsellor to provide advice."

The Tunas Mekar project, a collaborative effort between UiTM and the Implementation and Coordination Unit of the Prime Minister's Department, was started in Penang in 2005, and followed by Wilayah FELDA, Terengganu, Kedah, Johor, Kelantan, Malacca, Pahang and Selangor.

A total of 245 graduates were involved in the first phase. Based on impact studies in July 2007, 90 per cent of entrepreneurs and 95 per cent of students are satisfied with the project while 82 per centof the entrepreneurs reported an improvement in sales and profit levels.

Presently, more than 150 graduates from the programme have started small businesses, including operating restaurants, grocery shops, cleaning services, construction company, photography shops, beauty services, printing, computer sales and child care services.

Most of them earned a net profit of between RM2,000 and RM4,000 a month and employed between three and four workers.

There are also at least 10 outstanding entrepreneurs who are earning more than RM10,000 a month.

Their experiences with Tunas Mekar have proven to be a valuable asset when applying for financing from banks and funds.

Following the successful implementation of the pilot project, the government has allocated additional funds for the project to be implemented in all states and, to date, a total of 480 graduates have been enrolled in the second phase.

"The number students who dropped out was fairly high in the first few months of the programme, as many were not up to the rigorous demand of being entrepreneurs.

"However, the rate was reduced when we interviewed and selected only those who have a deep interest in entrepreneurship and business careers."

"Graduates chosen for the project must aspire to become entrepreneurs and are imbued with entrepreneurial characteristics that make them determined, hard working, resilient, adventurous and willing to take calculated risks.

"Generally, the chosen graduates are good human resource materials whom we believe have a high potential to be successful entrepreneurs.

"Given the opportunity through Tunas Mekar, they will learn the ropes fast and I will not be surprised if they emerge as business leaders in the country one day."

Source: NST

Stimulus package to help SMEs do business in cyberworld

2010-02-18T16:14:00.002+08:00

THE Malaysian government has teamed up with Internet search engine giant Google and two local universities to offer a stimulus package for local small- and medium-sized enterprises (SMEs) to help boost their presence in the cyberworld.

Dubbed the "SME Business Stimulus Package", it will help local SMEs, especially new entrants to the online world, set up a web presence and do business via the Internet.

There are now over 550,000 SMEs in the country, but most of them do not have an e-commerce platform or an online website that allows to do business transactions like order, purchasing and payments.

The tie-up between the Ministry of International Trade and Industry, Google, Multimedia University and Universiti Tunku Abdul Rahman is expected to help boost the online presence of local SMEs.

"We are continuing to see double-digit growth in user base and advertiser base moving forward," Google Southeast Asia head of online, Charif El-Ansari said.

Local SMEs that have products to sell can apply for the package, which will allow them to have their own website designed by one of the two local universities. They are also entitled to RM200 worth of free credit from Google, which can be used to start an online marketing campaign with Google AdWords, a search engine marketing platform.

"This SME Business Stimulus Package is very much in line with our mission to promote international trade and develop industrial activities to enhance Malaysia's economic growth," said Miti secretary-general Tan Sri Abdul Rahman Mamat.

Source: Business Times

Move to develop 4,000 women entrepreneurs by 2012

2009-12-11T22:10:00.002+08:00

THE government aims to develop 4,000 women entrepreneurs by 2012, said Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir.
He said SME Corp Malaysia Bhd has set up a special unit to monitor, coordinate and formulate programmes for women entrepreneurs through collaborations with various ministries, agencies and business associations.
"In order for women entrepreneurs to compete globally, Matrade through Women Exporters Development Programme has introduced export assistance programmes, designed for women owned businesses that are new to or have limited experience in exporting.
"These programmes will definitely help SMEs develop the necessary skills and knowledge to penetrate and further expand their export markets," he said.
WENA's president, Raja Azam Baezah Raja Mokhtar, said a common problem for women Bumiputera entrepreneurs is the lack of branding for their products.
"Many also don't have much capital to bring their business to the higher playing level," she said of WENA, a six-year old non-profit organisation with 200 people as members.
WENA conducts regular meetings with members and guides them on how they should market their products or get the right grants.
"We can point them in the right direction on what and where to go next,"she said. - BT

Aim for National Mark, SMEs told

2009-12-11T22:05:00.002+08:00

MALAYSIA'S small- and medium-scale enterprises (SMEs) must strive to achieve the mark of distinction, or National Mark, which is the government's stamp of approval on companies with attributes of quality, excellence and distinction of products and services.

It is said that through the National Mark, the government intends to bring products and services of Malaysian SMEs to a higher quality and enhance packaging standards to be on par with products of more established brands.

Malaysia External Trade Development Corp (Matrade) will undertake various promotion activities for brands that have been awarded the National Mark.

To date, it is learnt that more than 14 applications have been received for the Malaysian Brand Certification Scheme.

Out of these, only one company has been certified.

SME Corp Malaysia introduced the SME-Brand Development Programme which was endorsed by National SME Development Council in 2007.

One of the programmes is the development of the National Mark of Malaysian Brand undertaken by SME Corp Malaysia in collaboration with Matrade and Sirim Bhd

Companies that fulfil the set criteria and have successfully undergone the audit process will be certified and ultimately granted the use of the National Mark.

Indeed, this is the mark that the market should look out for.

SMEs were called to invest in the development of human resource capability, which is key to innovation, and to enhance collaboration with other players within their respective industries and stakeholders.

SMEs represent 99.2 per cent of total business establishments in Malaysia and are an important source of endogenous growth towards transforming Malaysia to become a high-income economy in the new economic model.

Growth strategies for SMEs

2009-12-11T22:00:00.001+08:00

THE government has put in place a number of strategies geared to further develop existing industries and also create new business opportunities for small and medium enterprises (SMEs).
They are centered on potential new growth drivers, namely in the services, agriculture and manufacturing sectors.
Prime Minister Datuk Seri Najib Razak had said as support, infrastructure, institutional framework and appropriate incentives will be provided to facilitate a conducive investment environment for SMEs to leverage on the new business opportunities.
He said growth areas identified include among others those in electrical and electronics, medical devices, textiles and apparel, machinery and equipment, petrochemicals, pharmaceuticals, wood-based, rubber and rubber-based products, oil palm-based and food processing.
"One sector we strongly encourage SMEs to enter into is biotechnology, with programmes that include facilitating business start-ups, capacity building and product development," he said.

Najib said various initiatives are made available for SMEs in their effort to acquire new technologies such as the Technology Database, Technology Roadmap Repository, development of i-SMEs as well as the Technology and Innovation Showcase.
He said the liberalisation of the services sector is also expected to spur investments in new areas and create higher value employment opportunities.
"The services sector will continue to be a key driver of growth and adopting new technologies will be key factors, especially in non-traditional services such as information communication technology, health, education, shared service and outsourcing," he said.
Elaborating on the SME annual report 2008 titled "Rising to Meet Global
Challenges", Najib said a total of 174 programmes, including 17 new ones, worth RM3.04 billion are being implemented to further enhance the capacity and capabilities of SMEs.
"To ensure effective and efficient implementation, SME Corp will introduce a new framework to closely track implementation of the programmes and undertake independent assessment using an outcome-based approach, namely the Impact Analysis Framework on SME Programmes," he
said.
Last year, a total of 202 programmes worth RM3 billion were carried out, benefiting 598,000 SMEs, accounting for a two-fold increase from the number of beneficiaries in 2007.
"SMEs will be developed based on three strategic thrusts - strengthen infrastructures that support, develop capacity and capabilities and increase access to financing," Najib said.

Source: BT