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‘SMI : Face to Face Funding Solutions’
BY
ISMAIL HASHIMDIRECTOR SMIDEC
NORTHERN REGION OFFICE
To formulate policy and implement programmes for the development of SMEs in Malaysia;
To provide technical and advisory support services in collaboration with other related agencies involved in SMEs development;
To forge industrial linkages between SMEs and large companies/ Multinational Corporations (MNCs);
To implement, coordinate and monitor financial assistance schemes provided to SMEs;
To collaborate with other local and international SME related agencies to develop SMEs .
FUNCTIONSFUNCTIONS
SMEs AS A DYNAMIC AND
INTEGRAL PART OF THE
MALAYSIAN INDUSTRIAL
COMMUNITY LINKED TO THE
INTERNATIONAL SUPPLY
CHAIN
TO ENHANCE THE
COMPETITIVENESS,
EFFICIENCY AND
PRODUCTIVITY OF
SMEs
Promotion andPublication
EnterpriseDevelopment
Corporate FinancialAssistance
AdvisoryServices
StrategicPlanning
Chief ExecutiveOfficer
Members of theCorporation
Minister ofInternational Trade
and Industry
General administration and corporate functions of the Corporation and matters pertaining to relation with the government
Formulation of policies and guidelines for the financial assistance programmes.
Responsible for the formulation, implementation and management of promotional policies and strategies on SME assistance programmes
Developing and nurturing SMEs
to become reliable
and competitive manufacturers
and suppliers to
leading industries.
Management of the SME Information & Advisory Centre so as to disseminate updated and real-time information to SMEs
Formulation of policies, programmes and incentives for the development of Malaysian SMEs
SMIDEC: ORGANISATIONAL STRUCTURE
DEFINITION OF SMEs
“Companies in the Manufacturing and Manufacturing related services sectors with annual sales turnover not exceeding RM25 million and full time employees not exceeding 150”
OUR CLIENT
•SMEs in the manufacturing sector;
•SMEs in the manufacturing related services sector; and
•Recently, the scope has been expanded to include SMEs in the Services sector
NEW SECTORS UNDER PURVIEW
LOGISTIC
PROFESIONAL MANAGEMENT
(ACCOUNTANT, LAWYER ETC.)
DISTRIBUTIVE TRADE (RETAIL / WHOLESALE)
Recently, the scope has been expanded
to include SMEs in the Services sector
SMEs by size24%
76%Medium
Small
• 44,185 manufacturing companies registered with Companies Commission of Malaysia.
• 20,455 are active establishments.
• 18,271 or 89.8 are SMEs.
PROFILE OF SMEsPROFILE OF SMEs
MALAYSIA : SME’s CONTRIBUTION IN THE MANUFACTURING SECTOR
MALAYSIA : SME’s CONTRIBUTION IN THE MANUFACTURING SECTOR
2003 2002
Output 29.1 28.5
Employment 32.5 26.5
Value added 26.2 30.7
13%4% 4% 3%4%
7%
7%
7%9% 9%
10%
13%
10%
General Manufacturing
Wood and Wood products
Food, Beverages and Tobacco
Paper and Paper Products
Machinery and Equipments
Textile, Apparel and Leathers
Rubber and Plastic
Electrical and Electronics
Chemical, Petroleum Coal
Metal
Non Metallic Mineral Products
MARKET SHARE:EXPORT - 20%DOMESTIC - 80%
MARKET SHARE:EXPORT - 20%DOMESTIC - 80%
Transport Equipment
General manufacturing (i.e. jewelry,sporting goods
DISTRIBUTION BY SECTORSDISTRIBUTION BY SECTORS
BASIC PROBLEMS FACED BY SMEs
• Access to market
• Access to finance • Low level of technology
• Lack of labour and skilled manpower
• Operating on non- designated zones
CHALLENGES CONFRONTING SMES
• Increasing global competition resulting from trade liberalisation measures; AFTA, WTO, Bilateral FTAs
• Emergence of new technologies and the lack of capacity to absorb new technologies in the manufacturing and management processes
• Development in ICT, internet and e-commerce and the impact on global production system
• Increase in factor costs and the impact of the entrant of new economies with surplus labour into the market system
SME DEVELOPMEN
T PROGRAMMES
SME DEVELOPMEN
T PROGRAMMES
BROAD BASED PROGRAMMES
• Market development• Financing• Technology and ICT adoption• Innovation and R&D• Skills development• Infrastructure development
MARKET DEVELOPMENT
• INDUSTRIAL LINKAGE PROGRAMME (ILP)
• business matching
• link SME companies to large companies as suppliers of part and components
• MARKET DEVELOPMENT SCHEME (through MATRADE)
• identify potential market
• undertake export market promotion, development of brand names.
• participate in international trade fairs and missions
• SMIDEC ANNUAL SHOWCASE (SMIDEX 2004)
• ENTERPRISE 50 PROGRAMME
FINANCING
SOFT LOAN
SOFT LOAN PACKAGE FOR SMEs
SOFT LOAN SCHEME FOR FACTORY RELOCATION
SOFT LOAN FOR ICT ADOPTION
GRANT
INDUSTRIAL TECHNICAL ASSISTANCE FUND (ITAF)
• Technology Acquisition Fund - MTDC
• Soft Loan for ICT Application
• Grant for RossettaNet Standard Implementation
• Technology Acquisition Fund - MTDC
• Soft Loan for ICT Application
• Grant for RossettaNet Standard Implementation
ADOPTION OF TECHNOLOGY AND UTILISATION OF ICT
INNOVATION AND R&D
GRANT FOR PRODUCT AND PROCESS IMPROVEMENT (ITAF 2)
COMMERCIALISATION RESEARCH AND DEVELOPMENT FUND (CRDF) – MTDC
INDUSTRIAL GRANT SCHEME (IGS) - MOSTE
SKILLS DEVELOPMENTUpgrading of skills for employees of SMEs through 19 Skills Development Centres:
- PUSPATRI - TATI - NSSDC
- GMI - MFI - MISDC
- KISMEC - PSDC (Penang) - SIRIM
- PESDC - PSDC (Pahang) - NIOSH
- SHRDC - PPKS - TPM
- SSTC - MINT - IKRAM
- NPC
50% Grant on training fees – SMIDEC
Focus on Hardskill
INFRASTRUCTURE DEVELOPMENT
Development of industrial sites for SMEs (integrated concept)
Development of common facilities for waste disposal, warehousing, employees’ accommodation, etc.
Infrastructure costs through grant provided by SMIDEC
Factory building affordable to SMEs
Global Supplier Programme (GSP)
The GSP involves training in critical skills and also linkage to MNCs and large companies. The training initiative is implemented in collaboration with local Skills Development Centres
Through the linkage initiative of the GSP, SMEs are developed to be competitive suppliers of parts and components, not only to MNCs in Malaysia, but also their worldwide operations through the mentoring activities.
SME EXPERT ADVISORY PANEL (SEAP)
SEAP is a programme initiated by Small and Medium Industries Development Corporation (SMIDEC) through the emplacement of retired experts at the factory sites of SMEs to solve SME’s specific problems.
The programme is to assist SMEs to upgrade their technological capability, to achieve efficiency and to increase productivity.
Form of AssistanceA maximum of RM18,000.00 or 60 man days per project.
GRANTGRANT SOFT LOANSOFT LOAN
• SOFT LOAN SCHEME FOR
SMEs
• SOFT LOAN SCHEME FOR FACTORY RELOCATION
• SOFT LOAN FOR ICT ADOPTION
• INDUSTRIAL TECHNICAL ASSISTANCE FUND (ITAF)
• FACTORY AUDITING
•ROSETTANET
PROGRAMMESPROGRAMMES
SUMMARY SUMMARY FINANCIAL ASSISTANCE FINANCIAL ASSISTANCE PROGRAMMES FOR SMEsPROGRAMMES FOR SMEs
(a) ITAF 1BUSINESS PLANNING & DEVELOPMENT SCHEME
(b) ITAF 2PRODUCT AND PROCESS IMPROVEMENT SCHEME
(d) ITAF 4MARKET DEVELOPMENT SCHEME
S C H E M E
(c) ITAF 3PRODUCTIVITY AND QUALITY IMPROVEMENT AND CERTIFICATION SCHEME
ITAF 1 ITAF 2 ITAF 3 ITAF 4
RM 60,000RM 40,000
RM250,000RM500,000
Provides Grant to Assist SMEs in:
Market feasibility studies Technology feasibility studies Business planning studies Domestic and export market strategy studies
Form of Assistance: Matching grant not exceeding RM40,000 per
company or 50% of approved project cost, whichever is lower.
Provides Grant to Assist SMEs in:
Product; Product design; Process
Form of Assistance: Matching grant not exceeding RM500,000 per
company or 50% of approved project cost, whichever is lower.
Provides Grant to Assist SMEs in:
Productivity and Quality Improvement Productivity and Quality Improvement based on
customer's requirement Development of Productivity and Quality Improvement Productivity and Quality System Certification Quality Development Systems (5S), Quality Control
Circles(QCC), , Total Preventive Maintenance TPM) Occupational and safety measures Quality Series : ISO 14000, ISO 18000 HACCP, HALAL and other product quality certifications
Maximum grant allocated per company is RM250,000
(matching grant of 50% of approved project cost)
Objectives of the Scheme are:
To undertake a diagnostic audit on SMEs that have potential to be linked to theMulti National Corporations (MNC)/large scale companies;
To assist SMEs in identifiying thier strengths and weaknesses in order to help them undertake remedial measures to enhance thier capabilities
Form of Assistance: Matching grant not exceeding RM10,000 per
company or 50% of approved project cost, whichever is lower.
The Scheme provides assistance to local Electrical and Electronic (E&E) companies:
• To implement RosettaNet , an internet based common messaging standard for global supply chain management;
• Enables companies in the supply chain to communicate and conduct business electronically through common codes sourcing of parts and components;
• Acquisition of RosettaNet Middleware which include software, hardware and licensing fee to embrace global supply chain management system.
• Matching grant for large companies – Max.RM 100,000
• SMEs – ASP Model – 70% Grant, Max. RM 30,000
[ICT APPLICATION] – GRANT FORROSETTANET STANDARD IMPLEMENTATION
SOFT LOAN SCHEME FOR SOFT LOAN SCHEME FOR SMEsSMEs
• Offers assistance to SMEs in modernising and automating their manufacturing operations
• Working Capital Financing
• Fixed Asset Financing
• Project Financing• Pre-operational expenses• Fixed asset financing
• Working capital
• Both existing as well as start-up companies are eligible for:
• Project Financing
FLEXIBLE AND ATTRACTIVE TERMS OF SLSMELoan Size
Project Financing - maximum of RM 5 mil.
Fixed Asset Financing-maximum of RM 2.5 mil.
Working Capital Financing - Maximum of RM 1 mil.
Minimum Loan - RM50,000.00
Refinancing is not allowed
Interest Rate
4.0% p.a
Repayment Period
5-15 years
Grace period – 2 years
SOFT LOAN SCHEME FOR SOFT LOAN SCHEME FOR ICT ADOPTION ICT ADOPTION ENGINEERING DESIGN CAPABILITIES
• To purchase of design software (CAD, CAM, CAE) or subscription fee/license fee for on-line engineering design services;
• Purchase of computer hardware and related equipment;
• Training cost.
ENTERPRISE RESOURCE PLANNING (ERP) SORFTWARE
• Purchase of ERP software or first year subscription to on-line ERP system, or other similar software (CIM, ERM, MRP, SCM, CRM);
• Implementation cost including system study, customisation and training;
• Purchase of server and related networking equipment.
Loan Size
Max. Loan - RM250,000
Min. Loan – RM20,000.00
Interest Rate
3.0% p.a
Repayment Period
5 years
FLEXIBLE AND ATTRACTIVE TERMS OF SOFT LOAN FOR ICT
SOFT LOAN SCHEME FOR SOFT LOAN SCHEME FOR FACTORY RELOCATION FACTORY RELOCATION
• Assistance to SMEs to relocate their factories to approved industrial sites
• The loan is provided to fund:
- Purchase of ready-made factories;
- Purchase of factory lot and construction of factories
including related infrastructure; and
- Costs to purchase related machinery and equipment due to relocation
- Max. loan RM 1 mil.
- Terms – similar to SLSME
•To integrate more companies / enterprises owned and run by women into the mainstream of manufacturing through inter and intra industry linkage
•To enhance the global competitiveness of
companies / enterprises owned and run by women
•To upgrade the technological capabilities and technical skills and expertise of companies / enterprises owned and run by women
To allow greater access to financing for women entrepreneurs
The sector coverage of this Scheme has been expanded to include other activities
Specifically packaged to be more flexible and accessible to women entrepreneurs
OB
JEC
TIV
ES
OB
JEC
TIV
ES
SPECIAL ASSISTANCE SCHEME FOR WOMEN ENTREPRENEURSSPECIAL ASSISTANCE SCHEME FOR WOMEN ENTREPRENEURS
SECTOR COVERAGESECTOR COVERAGE
• MANUFACTURING ACTIVITIES As per in the Promoted Products / Activities list of PIA, 1986
• RELATED SERVICES:
i) IT and IT Related Services
ii) Education Services
iii) Software Development
iv) Designing And Packaging
v) Research And Development (R&D)
vi) Marketing
vii) Tourism
viii) Other Business Services
OUTREACH PROGRAMME
Undertakes various promotional programmes to reach out to the SMEs through seminars, workshop, business clinics and exhibitions.
SME Information & Advisory CentreSME Information & Advisory Centre Aims to disseminate up-to-date and real-time Aims to disseminate up-to-date and real-time information to SMEs. The centre comprises: information to SMEs. The centre comprises:
Virtual SME Info Centre SMIDEC Regional Offices
Tol free line : 1-800-18-1801
SMEs are critical component of industrial economic development
Linkages with large companies providing critical supporting services and assisting in cluster development
High contribution in increasing local content and domestic participation in the manufacturing sector
CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSION
SMEs need to be nurtured and develop to increase their contribution to output, value added and employment. Current contribution is still small compared to develop countries.
Need to enhance and speed up intergration of SMEs with the mainstream domestic manufacturing sector and the global supply chain.
SMIDECNORTHERN REGION OFFICE
LORONG PERUSAHAAN BUKIT MINYAK 2TAMAN PERUSAHAAN BUKIT MINYAK
14100 SEBERANG JAYAPULAU PINANG
Tel: 04-5024207 Fax: 04-5024205E-mail: [email protected]
http : //www.smidec.gov.myToll Free Line : 1-800-18-1801