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SECURING FUNDS DURING ECONOMIC DOWNTURN PART 1 – SECURING FUNDS FROM GOVERNMENT MIA REGIONAL CONFERENCE 2009, 10 – 11 AUGUST 2009“Exploring Opportunities, Inspiring Growth Towards Sustainability” En. Borhan bin SidikDeputy Chief Executive Officer, SMIDEC
Presentation to cover… • Transformation of SMIDEC to SME Corp. Malaysia • Overview of SMEs in Malaysia • Impact of global crisis on SMEs • Government measures for crisis • Other Government funds and programmes • SME Corp. Malaysia’s assistance programmes • SCORE as comprehensive tool for risk evaluation • Moving forward Banking Summit 2009
Transformation of SMIDEC to SME Corp. M’sia • SME Corp. M’sia, Secretariat to the National SME Development Council (NSDC), the highest policy making body to chart SME development NSDC Secretariat SME Corp. M’sia Policy Development Programme Implementation Coordinate policies & programmes Mgmt of data & Info dissemination & Research Capacity Building Programme Financial Assistance Programme One-stop SME advisory centre Referral Centre on SME development and issues
Overview of SMEs in Malaysia SMEs constitute 99.2% of business establishments Overview of SMEs in Malaysia 99.2% or 548,267 of total establishments 32% of GDP SME Overview Employ 56% workers • 80% are micro- • enterprises 19% of total exports • 87% services • 7% manuf. • 6% agriculture Source: Census of Establishment and Enterprise 2005, Department of Statistics Malaysia 4
SMIDEC Impact of fin. & econ. global crisis on SMEs: 77% of respondents affected • Impact evident since 4Q’ 08 and intensified in 1Q’ 09 • Manuf. experienced earlier than services, particularly those in export-oriented sector % Timing of Crisis Affecting SMEs Source: SMIDEC Survey April/May 2009
SMIDEC Sales, profit margin & selling price affected, and future orders indicate poor prospect s • However, companies remained lean - low inventory level Source: SMIDEC Survey April/May 2009 6
SMIDEC Reduction in demand is the main issue Issues Measures % % Source: SMIDEC Survey April/May 2009 7
SMIDEC SMEs Outlook for next 6 Months • Overall : pessimistic on outlook • >50%: conditions to worsen / remain unchanged • 70%: recovery in 2010 and beyond • 20%: contemplating downsizing operations, closing down / relocating • Nevertheless: • 24% - positive view • 19% - saw opportunity to grow business • (first survey: 12%) WHAT SMEs PLAN TO DO OUTLOOK Source: SMIDEC Survey April/May 2009 8
SMIDEC Govt took aggressive measures to address SME’s concerns • Policy measures huge and comprehensive • 25 funds and facilities : Total RM15.6 billion (2% of GDP) • SME Assistance Facility • SME Modernisation Facility • Restructuring/ • Rescheduling • Working Capital Guarantee Scheme • Industry Restructuring Loan Guarantee • Financial Guarantee Institution (Danajamin) RM 1.2 bil 9
SMIDEC Measures addresses key areas of concerns • Initially to assist SMEs cope with higher prices, later to weather the impact of global crisis 10
Facilities that SMEs Can Avail Themselves Mainly to enhance access to financing during the crisis.
BNM Special Funds and Guarantee Facilities Banking Summit 2009
SME Corp. M’sia : Financial assistance programmes Financial assistance covers the entire spectrum of activities in the business cycle and scope will be extended to all sectors eventually • Manufacturing & Services: • Business Start-Up • Product & Process Improvement • Certification & Quality Management Systems • Market Development • Development & Enhancing Product Packaging Promotion of Halal Products • Advertisement & Promotion • Manufacturing & Services • Soft Loan for SMEs (SLSME) • Soft Loan for Factory Relocation • Soft Loan for ICT Adoption 15
SME Corp. M’sia: Capacity development programmes Focusing on facilitating linkages, enhancing skills & entrepreneurship technology innovation, motivation & advisory services • 1. INDUSTRIAL LINKAGE PROGRAMME 6. TECHNOLOGY AND INNOVATION PROGRAMME 7. NATIONAL WOMEN ENTREPRENEUR AWARD (NWEA) 2. SKILLS UPGRADING PROGRAMME 3. BUMIPUTRA ENTREPRENEUR ENHANCEMENT PROGRAMME ( BEEP) 8. ENTERPRISE 50 AWARD PROGRAMME 4. SME – UNIVERSITY INTERNSHIP PROGRAMME 9. SME EXPERT ADVISORY PANEL (SEAP) 5. SME COMPETITIVE RATING FOR ENHANCEMENT (SCORE) 10. OUTREACH PROGRAMMES 16
SME Corp. M’sia: Advisory services - enhanced delivery system to reach more SMEs efficiently 3-pronged approach for better outreach to SMEs & to reduce cost Capacity building Infrastructure Processes Kelantan (Kota Bahru) Kedah / Perlis (Alor Setar) • Branches increased to all states • (from 4 to 18) • Standard loan application form for all Ministries / Agencies Terengganu (Kuala Terengganu) • SME Business Coaches Pulau Pinang (Bukit Mertajam) Sabah (Kota Kinabalu) Pahang (Kuantan) Perak (Ipoh) • SME Business Counsellors Kuala Lumpur (HQ) • Use of SMS to check status of loan/grant application N. Sembilan (Seremban) Melaka (Ayer Keroh) Johor (Johor Bahru) • SME Business Advisory Centre Sarawak (Kuching) • Business Licensing Electronic Support System (BLESS) 17
SMIDEC SME Competitive Rating for Enhancement (SCORE), a tool to evaluate and track SME’s capabilities & performance SCORE Visit SME • Basis: • Identify weaknesses of SMEs to facilitate focused and integrated hand-holding assistance to SMEs; • Link potential SMEs with large companies/ companies / MNCs ; • Identify & facilitate suitable financial assistance for development of SMEs 18
Analysis of SCORE Results SCORE – 3 STAR FIRM SCORE – 2 STAR FIRM Banking Summit 2009
Moving Forward • Govt has provided various assistance to SMEs complementing the banking system • Awareness of programmes still lacking, SME Corp. M’sia will intensify the integrated outreach and promotional activities • SMEs to remain relevant despite challenging environment • Revisit business plan and strategies • Take advantage of various funds / facilities and programmes • Enhance capacity & capability, adopt new technology and processes • Be ready to reap opportunity when economy recovers • Info on Govt’s funds and facilities & development programmes: • www.smeinfo.gov.my • www.smidec.gov.my • “Policies, Incentives, Programmes and Financial Assistance for SMEs” Handbook (SMIDEC) • SME Annual Report
SMIDEC SME BUSINESS CENTRE INFOLINE 1-300-88-1801 Send to 15888 Business Advisory Services (BAS) THANK YOU VIRTUAL SME INFORMATION CENTREinfo@smidec.gov.my/www.smidec.gov.my SMS for Grants Status & Other Information