sme development framework: the malaysian case€¦ · sme development framework: the malaysian case...
TRANSCRIPT
Dato’ Hafsah Hashim, CEO SME Corp. Malaysia
SME DEVELOPMENT FRAMEWORK: THE MALAYSIAN CASE
Cairo AMC-CBE-WBG SME Conference, 14 - 15 January 2015
-2-
97.3% (645,136) business establishments in the country are SMEs
SMEs cut across all sectors of the economy
90%: Services
5.9%
3%
1%
0.1%
Manufacturing
Construction
Agriculture
Mining & Quarrying
GDP Employment Exports
33.1% 57.5% 19%
SMEs contribution to the economy
Source: Department of
Statistics Malaysia and
SME Corp. Malaysia
SMEs an important contributor to the development in Malaysia
Micro: 77%
Small: 20%
Medium: 3%
-3-
New definition of SMEs beginning 2014
• Manufacturing: Sales turnover
≤ USD14.10 mil. OR full-time
employees ≤ 200 workers
• Services & other sectors:
Sales turnover ≤ USD 5.60 mil.
OR full-time employees ≤ 75
workers
• Locally incorporated under
Companies Act 1965; or
• Registered under ROBA (1956)
or (LLP) Act 2012; or
• Registered under respective
authorities in Sabah & Sarawak; or
• Registered under respective
statutory bodies for professional
service providers.
Not public-listed company in main
board in Malaysia or other countries
Not a subsidiary of public-listed
company in main board in Malaysia
or other countries
Not a subsidiary of large firms,
MNCs, GLCs, Syarikat Menteri
Kewangan Diperbadankan (MKDs)
and State-owned enterprises
1
3
2
4
5
-4-
Details by size
Micro
Small
Medium
Manufacturing Services and Other sectors
Sales turnover:
< USD84,700
OR
Employees: < 5
Sales turnover :
< USD84,700
OR
Employees: < 5
Sales turnover:
USD84,700 < USD4.24 mil
OR
Employees: From 5 to < 75
Sales turnover:
USD84,700 < USD847,000
OR
Employees: From 5 to < 30
Sales turnover:
USD4.24 mil ≤ USD14.10 mil
OR
Employees: From 75 to ≤ 200
Sales turnover:
USD847,000 ≤ USD5.65 mil
OR
Employees: From 30 to ≤ 75
*USD1=RM3.54
-5-
SME Definition
Statistics
SME Development Framework
SME Masterplan
Centralisation of training
programmes, Advisory
Information – Annual
Report, SMEIPA,
SMEinfo portal
New financial products –
microfinance, guarantee
Financial infrastructure –
SME Credit Bureau, SDRS,
transformation of DFIs NSDC: National SME Development Council
Significant progress in SME development since establishment of NSDC… high level body
National SME Development Council
(NSDC)
-6-
Formulate
policy & undertake
economic
assessment
One Referral
Centre
Secretariat to NSDC
Coordinate
programmes &
policies
Including establishment of SME Corp., a dedicated Agency for SME development
NSDC
Ministries &
Agencies
SMEs
Chambers &
Industry
Associations
• Outcome of policies by NSDC
• Other supportive policies (improvement in government delivery, higher domestic
demand and tourism, focus on farmers and small contractors)
Outcome … SME growth performance impressive but still a long way to achieve a high income nation
-7-
Contribution of SMEs to GDP
0
10
20
30
40
50
60
Lowincome
countries
Middleincome
countries
Highincome
countries
Malaysia
(%)
16%
39%
51%
33%
-2
0
2
4
6
8
10
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
(%)
SME GDP Overall GDP
6.3%
4.7%
6.5-7%
5.5 -6%
SME vs Overall GDP Growth
Malaysian economy continues on a steady growth with domestic demand as the key pillar
-8-
Robust expansion in private investment
and improvement in external demand
Consolidation of
Public sector
Private consumption is expected to be underpinned by
healthy labour market
Malaysian Economy is expanding at 5.5-6.0% (2014)
Forecasted by MOF at 5-6% (2015)
• SME Development : Domestic demand gains momentum, as countries focus on
inclusive growth for long-term prosperity and social being of the nation
Doing Business Report 2014 by the World Bank • Malaysia has been ranked number one for six consecutive years for ‘getting credit’
since 2007 which mirrors a strong financing ecosystem in Malaysia
• Financial Institutions play an important source of external funding for SMEs contribute
about 95% (BIs: 90%, DFI: 5%)
How did we do it?
-9-
Standard format for financing and loan forms across all financial institutions (BIs and DFIs).
Working together with financial institutions associations and maintain good relationship with banking fraternity
Manage to keep lower NPL among SMEs by using SCORE : Setting a mandatory requirement for all financing applicants to undergo financing training management for non-financial managers
Role of Credit Guarantee as a financial tool
ME Breakout Strategy
Relationship
of FIs and
SMEs
-10- 10
5 programmes have been identified, targeting MEs across the various stages of the lifecycle …
Growth Start-up Expansion / Graduation
Graduate to SME
ME lifecycle
Valley of Death
Firm size & turnover
ME lifecycle stages
≤ 5 employees, ≤ RM300,000
turnover
Programmes Targeting MEs across the ME Lifecycle
Awareness and Outreach
StartMEUp P1
GrowME P2
MarketME P3
FastTrackME P4
ME MoneyMatters P5
-11-
• Increase market penetration of MEs to grow their customer base:
Enhance physical channels Access to online markets Distribution support
• Develop successful ME start-ups by providing a conducive start-up environment:
Simplify business registration process Provide start-up support
• Support increase in productivity and drive growth of MEs: Improve front- and back-office operations Leverage on ICT Upskill human capital Incentivise use of automation and services to drive
productivity
11
… with specific objectives under each programme
• Graduate MEs to SMEs through: Dedicated support Structured fast-track programme Results based assistance
• Create financial savvy MEs and increase MEs awareness and access to financial support:
Raise awareness on financing options Provide institutional support
Awareness and Outreach
Increase MEs awareness of the support resources available to them Strengthen SME Corp’s positioning as a one-stop entity for all ME-related support
StartMEUp P1
GrowME P2
MarketME P3
FastTrackME P4
ME MoneyMatters
P5
-12-
SMEs need to increase contribution
to GDP Contribution of SMEs to GDP in Malaysia
is much lower (33%) than:
• other middle-income nations (average
of 39%); and
• high income-nations (average of 51%)
… and to move up the value
chain SMEs currently concentrated in
low value-added activities
Why the SME Masterplan?
Going forward, SMEs important to achieve growth targets and socio-economic agenda of the country
-13-
SME Masterplan to chart development of SMEs through 2020 …
SME Masterplan (2012 – 2020)
Vision 4
Goals Macro
Targets
Globally competitive SMEs
across all sectors that enhance
wealth creation and contribute
to the social well-being
• Increase business formation
• Intensify formalisation
• Raise productivity
• Expand number of innovative
& high growth firms
GDP: 41%
Employment: 62%
Exports: 21%
-14-
…adopting a new approach to SME development
Approach
Public-private
partnership
‘Live’ plan
Outcome-based
Innovation and
productivity-led
-15-
New SME Development Framework for innovation-led and productivity-driven growth
Market Access
SME Development Framework
Goals
Increase
business
formation
Intensify
formalisation
Expand number
of high growth
and innovative
firms
Raise
productivity
Reliable
Database
Monitoring &
Evaluation
Effective
Coordination
Effective Business
Services
Innovation & Technology
Adoption
Human Capital
Development
Legal & Regulatory
Environment
Access to Financing
Infrastructure
Globally competitive SMEs across all sectors that enhance wealth
creation and contribute to the social well-being Vision
Focus
Areas
Institutional
Support
Action Plan
-16-
The focus areas identified as growth levers where constraints need to be addressed simultaneously
Innovation & Technology • Access to national innovation
system • Low commercialisation & R&D • Poor technology uptake
Human Capital Development • Workforce lacks job readiness • Low utilisation of existing
training • Non-competitive rewards &
benefits
Access to Financing • Limited non-banking avenues • Poor creditworthiness • Lack of know-how and
resources
Market Access • Procurement by Govt/LSIs • Information barrier to exports • Limited focus on marketing &
branding • Low bargaining power
Legal & Regulatory Environment • Licensing / permits • Complying to regulations • Legislations disincentivising
formation & growth
Infrastructure • Trade clearance and facilitation
system • Low and infrequent trade
volume
Constraints to Growth
-17-
Plan proposes 32 initiatives across all focus areas, of which 6 are High Impact Programmes
Integration of business
registration & licensing
to enhance ease of
doing business
SME Investment
Partner (SIP) to provide
early stage financing
Technology
Commercialisation
Platform (TCP) to
encourage innovation
Going Export (GoEx)
Programme to expedite
internationalisation of
SMEs
Inclusive Innovation to
empower the bottom
40%
Catalyst Programme to
promote more
homegrown champions
Resource pooling &
shared services
Reduce information
asymmetry
Create demand for
SME products
Building capacity &
knowledge
Improve connectivity &
basic amenities Ease market access
Review restrictive laws &
policies
Completion of integrated trade clearance and facilitation system (single window)
Synchronise measures on productivity enhancement
technologies with other relevant labour policies
Bankruptcy Law to give entrepreneurs a second
chance
High Impact Programmes
(HIPs
Measures across 4 Themes
Measures for East Malaysia
Other Measures
-18-
Outcome is measured at 3 levels
Macro
performance Programme
level
Firm level
GDP
Exports
Empl
OUTCOME
SCORE
1-
InnoCERT
SMEIPA
Masterplan
M&E
-19-
Target is to increase contribution to GDP to slightly over 40% by 2020
Economic Contribution
in 2020:
GDP
Employment
Exports
33% 41%
57% 62%
2013 2020
17% 25%
Projections by SME Corp. Malaysia
3
4
5
6
7
8
9
2000 - 05 2006 - 10 2011 - 20
GDP Growth
Quantum
leap
“Business
as usual”
growth
(6.2%)
New growth path
(9.3%)
CAGR (% change)
2014 - 20 2006- 13
Previous growth
path (8.7%)
-20-
Moving forward into 2020….
GDP
Exports
Focus will be towards:
Implementation of HIPs
Monitoring & evaluation on the programmes and impacts of SME
Masterplan’s initiatives
Undertake mid-term review in 2017 with
reference to progress of SME
Masterplan implementation
MALAYSIA
welcomes you…
to the
ASEAN SME Showcase & Conference 2015
21/12/2014 ASEAN SME Showcase 2015
Page 21
THANK YOU
www.smecorp.gov.my www.smeinfo.com.my 1-300-30-6000
Find us on Facebook
SME Corp. Malaysia