DEVELOPMENT PROGRAMMES AND FINANCIAL ASSISTANCE FOR SMEs BY

DEVELOPMENT PROGRAMMES AND FINANCIAL ASSISTANCE FOR SMEs BY : MASLINDA ZULKIFLY LEGEND HOTEL, KUALA LUMPUR 30 JULY 2008

ABOUT SMIDEC

SMIDEC Established under the Parliamentary Act, 539 on 2 nd May 1996 An agency under the Ministry of International Trade and Industry Focal point for the overall development of SMEs in the country Provides capacity building programmes and assistance through fiscal and non-fiscal incentives

VISION To be the leading organisation in developing SMEs that contribute to the economic growth and enhancement of Malaysia’s competitiveness

MISSION To transform SMEs to be vibrant, competitive and resilient and to be fully integrated into the manufacturing and services sectors

FUNCTIONS Promote, coordinate and implement programmes for the development of SMEs Forge industrial linkages between SMEs and large companies/multinational corporations (MNCs) Implement, coordinate and monitor financial assistance schemes Provide technical and advisory support services Collaborate with other local and international SME-related agencies

PROFILE OF SMEs

DEFINITION OF SMEs Annual sales turnover Manufacturing, Manufacturing Related Services and Agro based Industry < RM 25 million OR Full time employees <150 Annual sales turnover Services, Primary Agriculture, Information and Communication Technology (ICT) < RM 5 million OR Full time employees < 50

4, 537 (0. 8%) TOTAL ESTABLISHMENTS BY SIZE 12, 610 (2. 3%) 100, 333 (18. 2%) • Total establishments = 552, 804 • No. of SMEs = 548, 267 (99. 2%) 435, 324 (78. 7%) LARGE MEDIUM SMALL MICRO Source: Census of Establishments & Enterprises 2005 – Profile of SMEs

DISTRIBUTION OF SMEs BY SECTOR Agriculture Manufacturing (6. 2 %) (7. 2 %) Services (86. 6 %) Source: Census of Establishments & Enterprises 2005 – Profile of SMEs

CONTRIBUTION OF SMEs TO GDP (%) 37 32 19. 7 8. 4 3. 9 9. 6 4. 3 Source: National SME Development Blueprint 2007 23. 1

CONTRIBUTION OF SMEs TO EMPLOYMENT (%) 56. 4 57 33. 9 14. 5 8. 1 15. 1 6. 9 Source: National SME Development Blueprint 2007 35

SUPPORT FOR SMEs

SME Development Programmes SUPPORT FOR SMEs Incentives and Financial Assistance Programmes

SME DEVELOPMENT PROGRAMMES

ENHANCEMENT PROGRAMME SME EXPERT ADVISORY PANEL (SEAP) OUTREACH PROGRAMMES BRAND SME DEVELOPMENT PROGRAMMES SKILLS UPGRADING TECHNOLOGY & INNOVATION ENTREPRENEURSHIP

ENHANCEMENT PROGRAMME FOR SME s - AUTOMOTIVE SECTOR Identify Sector & SCORE SMEs Current On-Going Programme Malaysia-Japan Industrial Cooperation (MAJAICO) • Initiated under Malaysia. Japan Economic Partnership Agreement (MJEPA) CAPACITY BUILDING ü ü ü Quality Control and Improvement of Standard Waste Reduction Inventory Management Control and Improvement Reduction in rejection rate during production Technology Transfer of Mould & Die Technical Assistance • 5 -year project (20062011) • Improve productivity through Lean Production System • 150 projects to benefit from the Programme

ENHANCEMENT PROGRAMME FOR SME s - AUTOMOTIVE SECTOR …cont’d Benefits gained by companies under MAJAICO Programme • improvement in productivity from 30% to 200%; • reduction in unscheduled machine & tooling downtime from 4 days to 2 days; • reduction in rejection rate from 5% to 2 %; • reduce stock inventory by 17% - improvement in space utilisation and housekeeping; • create opportunity for employees to contribute and make improvement in their working areas on a regular basis; and • potential to penetrate into the international market.

SME EXPERT ADVISORY PANEL (SEAP) SMEs Visit , Diagnose & Recommend Improvements 53 industry experts ü Packaging & Labeling ü Production capabilities ü Compliance to Standards/ Certification ü Lean Production System ü Management & Financial Advis

BRAND SME DEVELOPMENT PROGRAMME OBJECTIVE • To promote and reinforce the value of individual SME brands. TARGET • To promote, reinforce and sustain the value of individual SME brands through the building of a National Mark; • Promote domestic and global recognition and acceptance of the National Mark; • To enhance the acceptability of SMEs’ products and services in domestic and foreign markets; • To facilitate and accelerate SME knowledge and appreciation in branding; and • 100 SMEs’ brands established overseas within four years.

TECHNOLOGY AND INNOVATION National SME Innovation Focal Point SMIDEC Research Institutions/ Universities Banks/ Financial Institutions SMEs

Members of the National SME Innovation Focal Point

TECHNOLOGY AND INNOVATION …cont’d Technology Database (in collaboration with MASTIC) - 270 technologies available for commercialisation - 18, 413 researchers’ profile available TECHMART in SMIDEC’s website SMIDEX‘ 07 : 23 technologies matched Technology Roadmap - Completed Roadmaps - Work In Progress - → → → Electrical & Electronics ICT Biotech industry → → Automotive Sector Plastics & Rubber

SMIDEC ANNUAL SHOWCASE

ENTREPRENEURSHIP Programmes under the Panel of Entrepreneurshi p University students – SME Attachment Programme Pilot Project on Entrepreneursh ip Mentoring Programme Tea-talk Program “Bicara Petang Bersama Usahawan”

ENTREPRENEURSHIP …cont’d UNIVERSITY - SME ATTACHMENT PROGRAMME • Benefits to SMEs: - exposure to the latest development of business practices and applications of technology; and - improved ways of doing business. University Education • Local & International Networking Local SMEs Benefits to students: - industry exposure and practical applications of their studies as well as enhance self confidence in doing business; and - inculcate the spirit of entrepreneurship. Students Linking SMEs to Universities to upgrade the capability of SMEs

SKILLS UPGRADING Enhancing Marketing Skills of SMEs Skills Upgrading Programme s Status: 22, 571 employees trained (RM 22. 3 million) a n tr n o t 80 ra g % e e f g inin

SKILLS UPGRADING. . . cont’d 35 SKILLS DEVELOPMENT CENTRES & PROFESSIONAL TRAINING PROVIDERS APPOINTED:

FINANCIAL ASSISTANCE PROGRAMMES Matching Grant Soft Loan • 50% of the approved project cost is borne by the Government and the remainder by the applicant • Low interest rate • Longer repayment period

QUALIFYING CRITERIA Companies incorporated under the Companies Act 1965 OR enterprises incorporated under the Registration of Business Ordinance 1956 OR Certificate of Practice by Regulatory Body Fulfill definition of SMEs At least 60% equity held by Malaysian Possess valid premise license SECTOR COVERAGE Manufacturing Related Services (Except Insurance and Financial Services)

RM 500, 000 MATCHING GRANTS RM 250, 000 RM 200, 000 RM 150, 000 RM 100, 000 Matching Grant for Business Start-ups Matching Grant for Product and Process Improvement Matching Grant for Certification and Quality Management Systems Matching Grant for Market Development Matching Grant for Development and Promotion of Halal Products Matching Grant for Enhancing Product Packaging Grant for Rosetta. Net Standard Implementation

MATCHING GRANT FOR PRODUCT AND PROCESS IMPROVEMENT Provides grant to SMEs for Product Development and Product & Process Improvement. Eligible expenses : • Technology Feasibility Studies • Fees for technology transfer • Development of prototypes and system design • Product testing & registration • Marking and labeling • Machine & equipment for testing and calibration • Development & designing of equipment and machinery • Purchase of machinery and equipment • Initial patent registration/patent search/IP Protection • Specific Project Mission • Cleaner Production and Waste Treatment Project

MATCHING GRANT FOR ENHANCING PRODUCT PACKAGING Designing and improving product packaging and labeling through appropriate packaging technology Eligible Expenses : • Related costs and services for designing, packaging, marking and labeling • Trade mark and patent registration • Purchase of related machinery and equipment

• Interest Rate: 2% • Max Loan: RM 3 million • Payment Period: 15 years Soft Loan for Business Premise Relocation (SLBPR) • Interest Rate: 2% • Max Loan: RM 500, 000 • Payment Period: 5 years Soft Loan for ICT Adoption (SLICT) Soft Loan for SMEs (SLSME) Soft Loan Schemes

NEW • 10 per cent of all value of all SMIDEC’s grants will be disbursed upon approval; • Interest loans for SMEs reduced from 4% to 2% per annum; and • Margin of financing increased from 85% to 90%.

OUTREACH PROGRAMMES

ENTERPRISE 50 AWARD PROGRAMME Prestigious award recognising the achievements of Top 50 enterprising home-grown companies Provide opportunities to benchmark against their peers 1996 - 2007 : • TOTAL NOMINATIONS - 1, 310 • TOTAL ALUMNI - 386 • LISTED ON MALAYSIAN BOURSE - 41

PUBLICATIONS Handbook on Policies, Incentives, Programmes and Financial Assistances SME Newslink : bi-monthly publication SME e. News : monthly e-mail blast Annual Report

PUBLICATIONS …cont’d Brochures Training Directory

PUBLICATIONS …cont’d Women Directory National SME Development Blueprint SME Annual Report Brochure for Services Sector

OUTREACH CHANNELS SME BUSINESS CENTRE (19 th FLOOR) Virtual SME Information Centre : info@smidec. gov. my / www. smidec. gov. my Info. Line : 1 -300 -88 -1801 Business Advisory Services (BAS)

T H A N K Y O U