FINANCE

• Global financial crisis have caused financial institutions to be more cautious and credit processing has become so complex, that very often SMEs find it difficult to both understand the procedures and decisions when it comes to loan processing.

HUMAN CAPITAL

• Severity of the brain drain, especially among professionals and skilled workers.

MARKET• Increase in competition.

• Rising cost of goods.

• The increase in uncertainty in the market. Businesses have to reduce costs and improve productivity in the midst of adapting to changing market conditions.

TECHNOLOGY• Challenge to acquire or develop new

technology.

• Many of the leading research and technological developments are coming out from Europe and North America. Finding partners and vendors who are willing to transfer these technologies to Malaysia is tough enough let alone transferring these technologies to SMEs.

“Our traditional and biggest obstacle has always been in financing our

projects. Despite our management skills, variety of profitable projects

and great plans – none of it will work without money”

Robert Michael of vacuum and compression solutions provider, Airo-fluid

Sdn Bhd.

“As we continue to grow, we require additional capital and financing

power for expansions which are not easy to come by as an SME”

Cheng Nyek Paw of Bennova Mechanical Engineering Sdn Bhd.

Rick Cheng, CEO of property developer Encomas Sdn Bhd couldn’t agree

more when he said, “it’s financing, financing, financing. It is getting

harder to secure financing from banks and they always set very high

requirements for us to achieve in order to get financing.

“Our business is all about the talents that we have. Whilst the

largest investment may be in the technology and equipment,

without our people, we will not be anywhere near where we are

today,” said Lim Boon Siong, CEO of Vista Vision Specialist.

Alan Hoo of image consultants Chapter One Asia agreed, saying,

“finding the right candidate at the right time and the right price is

like striking a lottery. Most capable young adults would prefer to

work in MNCs as it looks more promising, not to mention more

glamorous; making smaller organizations like us difficult in

finding suitable candidates”.

Ken Kang, Managing Director of Wah Ha Children Products Sdn Bhd said,

“In 2010, we faced stiff business challenge due to significant drop of

purchasing power of domestic consumers. Our challenge in 2011 will

be to build up the confidence of consumers and regaining their

purchasing power”.

World Prominence Sdn Bhd’s Ahmad Fauzi Kari said that his company’s

biggest challenge would be to manage the cost of doing business. “For us,

high and cyclical raw and packaging materials cost, increase in other

operational cost such as labour cost, utility cost and distribution cost

are putting tremendous pressure on us. Passing the increased cost

to the customers is not an easy task either,” he said.

Competition from lower cost producing countries of China, Vietnam etc.

Lack of expertise in export marketing

Lack of viability to export small quantities to overseas

Source : Mr. Chua Tiam Wee

National President

Small and Medium Industry Association of Malaysia

Financial Constraints to Acquire ICT & New Technology

Lack of Expertise on ICT complexities

Lack of ICT Technical Staff

Time and Effort to Learn to migrate to New Technology

High Software Licensing fees

Difficulties in Choosing the Right technology

Fear of Unreliability, Cyber Security, Data Loss.

Source : Mr. Chua Tiam Wee

National President

Small and Medium Industry Association of Malaysia