DEVELOPING COMPETITIVE

WOMEN-OWNED SMES
THROUGH COORDINATED PROGRAMMES
by:

Dato Hafsah Hashim

CEO of SME Corporation Malaysia

19 September 2014
1

Outline of Presentation
SME Development in Malaysia
Challenges faced by Women
Entrepreneurs

Initiatives
Moving Forward
2

SME DEVELOPMENT IN MALAYSIA

SME Corp. Malaysia: a dedicated

Agency for SME development
Coordinate
programmes &
policies

NSDC

Formulate
policy & undertake
economic
assessment

Ministries &
Agencies

SMEs
One Referral
Centre

Secretariat to NSDC

Chambers &
Industry
Associations

Definition
of SMEs
NEW
SME definition
Previous
Manufacturing,
Manufacturing
Related Services

and Agro-based
Industry
Manufacturing

Services,
Primary
Agriculture,
Information and
Services
and other
Communication
sectors (ICT)
Technology

Employees
Full time
employees

Turnover
Annual sales
turnover

< 150

OR
Full time
employees
< 50

< RM25
million

Annual sales
turnover
< RM5
million

Eec(ve
1st JNew
an 2014
Employees
Full time
employees

Turnover
Annual sales
turnover
< RM50
million

< 200

OR
Full time
employees
< 75

Annual sales
turnover
< RM75
million

SMEs are the backbone of the economy

Important domestic
source of growth

Foundation & support

in supply chain through
forward & backward
linkages

Balanced growth

Strengthen resilience of
the nation's economy

Provide support for

growth of new &
existing sectors

Promote private sectorled growth

6

SMEs are the backbone of the economy

SMEs account for large proportion of businesses in Malaysia:
- 97.3% of establishments (645,136)
- Size wise 77% microenterprises
micro
75%

662,939
companies

19%

57%

32.5%

small
19%
large
3%

medium
3%

Source: Economic/SME Census 2011, Malaysia

7

Distributions of SMEs by Sector...

Services (90%)
Wholesale & Retail (49.9%),
Food & Beverages Services (24.6%),
Transport & Storage (6.9%)

Manufacturing (5.9%)
Textiles & Apparels
(26.5%),
Food & Beverages
Products (15.9%),
Fabricated metal products
(10.5%)

Mining & Quarrying (0.1%)

Stone quarrying (83.6%),
Mineral Mining (16.4%)

Agriculture (1%)
Construction (3%)
Non-residential Buildings (21.5%),
Civil Engineering (21%),
Residential Buildings (17.3%)
Source: Economic Census 2011 Profile of Small and Medium Enterprises, DOSM

Crops (70.4%),
Livestock (13.4%),
Fisheries (11.6%)

Distributions of SMEs by State

The highest concentra(on of
SMEs are in Klang Valley (32.7%)

0.8%
5.8%

Perlis

5.9%
Kedah

6.3%

3.5%
Pulau Pinang

19.5%

9.3%

Kelantan

Terengganu

Perak

0.3%

4.6%
Labuan

Pahang
13.1%

Selangor

6.8%
10.7%

Melaka
3.4%

Sabah

3.8%

Kuala Lumpur
Putrajaya Negeri
Sembilan
0.1%

6.3%

Sarawak
Johor

Source: Economic Census 2011 Profile of Small and Medium Enterprises, DOSM

Holistic approach to SME development

brought positive results
Contribution of SMEs
32.7% of GDP

57.4% of employment

SME GDP to sustain at 5.5 - 6.5% for the year

after expanding by 6.3% in 2013

19% of exports
SME Contribution to GDP

60%
50%
40%
30%
20%
10%
0%

Source: DOSM, BNM Annual Report 2013 & SME Corp. Malaysia

51%
39%

32%

16%

Source: World Bank from Various sources

10

WOMEN-owned enterprises account for

19.7% of SMEs
MALAYSIA
(2010)

TAIWAN1
(2010)

AUSTRALIA2
(2009)

19.7%

36.2%

31.5%

Current Deni(on of Women-

owned Company

88% are
MICRO

Sources:
1. Economic/SME Census 2011, Department of StaAsAcs Malaysia
2.Ministry of Finance Tax Data Center, Taiwan
3.Australian Government, Department of Innovation, Industry, Science and
Research.

11

WOMEN-Owned SMEs by size and sector

CHALLENGES
Faced by
Women Entrepreneurs

Challenges that need to be addressed

Informal sector

Innovation & Technology

- Lack of exposure and access

- Operating in informal sector

- Lack of track record
- Hindrance from various
assistance available

to national innovation system

- Poor technology uptake due to
high cost of investment
- Low commercial value, capital and
too many competitor

Human Capital Development

Market Access
- Lack of knowledge on
procedures
- Non-compliance to
international standards

-Majority in micro category

-Tight manpower to run operations
- Limitations on retraining
and reskilling of staff

Access to Financing
- Poor financial bookkeeping
affecting creditworthiness
- Lack of know-how and
resources

Information Asymmetry
- Ignorance towards available
assistance

- Not proactive in looking for

information
14

INITIATIVES

15

Programmes Planned for 2014

GOVERNMENT
FUNDING
133 progs

RM7b

PRIVATE SECTOR
FUNDING
21 progs

RM6.4b

16

Programmes cut across 5 focus areas

Technology & Innovation
25 Progs; RM292.9m
Human Capital
Development
42 Progs; RM95.1m
Highest
no. of prog.
and biggest
allocation

Access to Financing
41 Progs; RM12,769.1m

Market Access
29 Progs; RM87.5m

149 Progs

Infrastructure
12 Progs; RM208.3m

RM13.5 billion
To benefit
527,807 SMEs
17

Holistic SME Development Initiatives

Access to
informa(on

Access to
nancing

Building
capacity &
capability

Cer(ca(on
& awards

Industrial
linkages &
Showcases

Assistance
18

SMEs premier referral centre

on programmes and initiatives
Business Advisory Services
ORC Link in collabora(on
Government Agencies and
other par(es

Available
informa(on
channels

Pocket Talk

Resource Centre
Info Centre - Info Line
(1-300-30-6000) and
Info Email
(info@smecorp.gov.my)

19

1
SCORE evaluation
3

2
0 2 stars:

Very basic
business operation

Capacity building

Improved
performance

Choose a model:
Manufacturing
Retail & Distributive
Trade
Construction
ICT
Maintenance, Repair &
Overhaul
Professional Services

SCORE
re-evaluation

3 5 stars:

Competitive & exportready companies

Financing & assistance

to go global

Enhanced
competitiveness
20

Holistic approach through BAP & E2

Create critical mass of dynamic,

competitive & resilient SMEs

Diagnose and identify strengths

& weaknesses of SMEs

BAP

Business advisory and

recommend action plan

Financial
Assistance

Capacity
Building
Training
Packaging & labeling
Certification & quality
management system
Innovation
Branding initiatives

Monitor &
Evaluate

SMEs 2-star
(SCORE) and
above

Micro Enterprises
of level 3 & below
(M-CORE)

In collaboration with
In collaboration with

21

Sharing theory and practice

University
(Academia)

Local SMEs

Exposure on:
! Business Best
Prac7ces
! Applica7on of
technology

Local &
Networking

Universities to share experience

and knowledge to upgrade the
capability of SMEs

Annual
Inter-university
Championship

Students

! Industry exposure
! Prac7cal applica7on
of studies
! Inculcate spirit of
entrepreneurship
22

Enhancing business acumen of SME owners

OBJECTIVE

MECHANISM

DESIRED
IMPACT

Enable
Training
m
odules

To improve
entrepreneurs to
include
c
ase
s
tudy
knowlegde and skills
drive diverse
assignment & management

of entrepreneurs
sharing of
through Training
innova(on and
experience by
Programme modelled
crea(vity by
successful
from Japan SME
strengthening
entrepreneurs.
University
business acumen.
Note : Commitment Fee of RM2,500 will be FULLY
REFUNDED upon successful comple(on
23

Ratings, Certifications & Awards

Serve as lter enabling corpora7ons and investors to shortlist high performing able
and/or innova7ve SMEs faster

SCORE Small Enterprises

MCORE Micro Enterprises
Enterprise 50 Award
Na7onal Mark of Malaysian Brand

Promote the development of

competitive, innovative and

resilient SMEs through

effective coordination
and
1-InnoCERT
provision of business support

24
24

Supply chain hierarchy

Multinationals

1st tier
supplier
- Partner
- Interdependency

2nd tier
supplier
3rd tier
supplier

- Servant
- Dominated
- No trust
- Price based

- High trust
- Provider
- Dependency
- Medium trust

- Rela7onship based

- Specica7on based
Source: Economic Planning Unit , Malaysia and The World Bank (July 2011)

25

ASEAN Economic Communityd(AEC) 2015

Indicators

Malaysia

ASEAN

Market Size

30 million

620 million

Total Trade

US$420 billion

US$2.5 trillion

GDP

US$288 billion

US$2.3 trillion

GDP Growth

5.1%

> 5%

5
1
0
AEC 2 et &

mark se-

e
l
g
n
-si
on ba
A
c
u
d
pro

26

ASEAN SME Showcase & Conference 2015

Showcase of
Products & Services

Conference

Business Matching
Pocket talks

27

Moving Forward

Moving forward, SME development to be

innovation-led and productivity-driven through
the SME Masterplan

Unless we introduce a game changer, we

will be caught in a middle-income trap, and
no longer as compeAAve on cost...

the Government would adopt a

dieren-ated approach to accelerate the
growth of SMEs and to provide the impetus
for growth led by the private sector.

an innova-on-led economy demands a

new breed of SMEs that can help foster
market and technology-driven innovaAon
to create more high-skilled jobs in all
economic sectors.

Prime Minister of Malaysia /

Chairman of Na(onal SME Development Council
29

Development of Women in business

a shared responsibility...

Government

Facilitator
Act as catalyst

4Cs:

Connect,
Communicate
Consult,
Collaborate

with private sector

assuming a greater
role
Private
Sector

Associa7ons, chambers & NGOs to develop SMEs

Large rms to mentor SMEs
Par7cipa7on in design & implementa7on of programmes

30

www.smeinfo.com.my
www.smecorp.gov.my
SME Annual Report 2011/12
SME Corp. Malaysia


1-300-30-6000

Physical
KL Sentral

1nita@smecorp.gov.my

31