Government Allocates RM70 Million For SME Development Programme
KUALA LUMPUR, Jan 25 (Bernama)-- The Small and Medium Enterprises Corporation Malaysia (SME Corp) and Small and Medium Enterprises (SME) Bank Malaysia will be allocated RM70 million under the new SME development programmes to enhance the capacity and capability of SMEs in the country.
"Most of it will be soft loans, we try to work on 50:50 ratio (50 per cent grant and 50 per cent soft loans) and gradually will reduce the grant portion, said Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed.
The two new SME development programmes, namely Business Accelerator Programme (BAP) and the Enrichment and Enhancement Programme (E2) are to ensure that the SME community is integrated into the mainstream of economic development.
"About RM40 million will be allocated for BAP," Mustapa told reporters at the signing of a Memorandum of Understanding (MoU) between SME Corp and SME Bank in conjunction with the announcement of the new SME development programmes here today.
The signing of the MoU will formulate and further strengthen the cooperation between the two agencies under MITI in implementing the BAP.
"In the 10th Malaysia Plan and in realigning SMEs into the New Economic Model, the Government will adopt a differentiated approach to accelerate the growth of SMEs and to provide the impetus for growth led by the private sector.
"In the short-term, this will include the adoption of outcome-based approach in monitoring and assessing the effectiveness of SME development programmes," said the Minister.
Meanwhile, business start-ups and micro enterprises will undergo the E2 and it will be made mandatory to undergo Micro-enterprise Competitiveness Rating for the E2.
In a separate press conference, Chief Executive Officer of SME Corp, Datuk Hafsah Hashim said the financing part of these programme would be provided in a hybrid form via combination of grants and loans.
Commenting on the growth of SMEs, he said the sector was estimated to contribute 35 per cent to the gross domestic product (GDP) of Malaysia by 2020.
Last year, SMEs' value-added growth was projected to expand between 8.0 and 8.5 per cent, while the overall economy is projected to grow at seven per cent.
"This is a very important indicator to show that the SME community has recovered from the recent economic crisis and we believe that for the first half of 2011, they will continue to grow," said Habsah.
From 2004 until 2009, the value added growth of SMEs has consistently outperformed that of the overall economy, averaging at an annual rate of 6.3 per cent compared to 4.5 per cent for the country's overall GDP growth.
"We hope that by putting in more structured and organised programmes, it will benefit the SME industry in terms of growth," she added.