Bernama.com (Malaysian National News Agency), 19 January, 2007

Govt Commits RM3.7 Bln For 190 SME Development Programmes

KUALA LUMPUR, Jan 19 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi Friday said the Small and Medium Enterprises (SME) Development Council Meeting has approved the implementation of 190 key programmes for SME development this year with a RM3.7 billion commitment.

Of the 190 key programmes, 134 are aimed at building the capacities and capabilities of SMEs, particularly in the area of human capital development, marketing and promotions, 28 to enhance SMEs' access to financing and another 28 to strengthen infrastructures to support SME growth.

These programmes would cover all sectors, including SMEs in agriculture and agro-based industries, and those involved in knowledge-based industries. Efforts would also be directed to promote Bumiputera participation in the SME sector.

In the area of financing, about 110,000 SME accounts are expected to receive a total of RM51 billion in loans extended by financial institutions. This would be complemented by about 37,000 loans to be approved under the various government schemes, Abdullah said.

Forty new companies in the ICT sector are expected to be financed under the ICT Fund, while the Biotechnology Commercialisation Grant aims to establish 35 projects, he told reporters this after chairing the Sixth National SME Development Council Meeting at Bank Negara Malaysia (BNM) here.

In addition, a number of key initiatives would be implemented to further increase the avenues for SMEs to obtain financing, including the introduction of Shariah-based financing facilities for BNM's Special Funds and New Trade Financing Products, Abdullah, who is also Finance Minister said.

On strengthening SMEs' capabilities, he said the government would provide advisory services to more than 60,000 SMEs. It would also develop about 780 new entrepreneurs, including 680 in knowledge-based industries and target for about 525 SMEs to participate in marketing and promotional related programmes.

On providing infrastructure to support SME support, he 500 business premises, factories and workshops would be provided to SMEs in rural areas.

He said 178 marketing infrastructure, such as product packaging, distribution and marketing centres would be established to ensure efficient and effective distribution of agro-based products of SMEs.

Three cocoa processing centres would be also set-up to increase the processing capacity of cocoa smallholders.

Abdullah said the government has also strengthened the monitoring of the progress and impact of all government programmes for SMEs.

"I believe that through the SME Blueprint Management Framework which the council adopted in 2005, the government will further improve the delivery and effectiveness of government programmes to ensure maximum benefits to the SMEs."

He said comprehensive programmes would be implemented this year to assist in capacity building, promotion, information management and provision of financial support to facilitate SMEs to market their products and services overseas.

As for the microfinancing initiatives, Abdullah said that through proactive steps by BNM several financial institutions have now committed to provide individuals and micro enterprises with fast, flexible and convenient access to finance to undertake their businesses.

One banking institution launched a new microfinance product in December last year, while several other financial institutions are expected to so in the current quarter.

The microfinance products offered by the financial institutions will have features such as small loan sizes ranging from RM500 to RM50,000, flexible loan tenure ranging from one month to five years.

The loan approvals would be also faster, ranging from five to 11 working days with incentives to encourage good repayment practices by borrowers.

To create awareness on microfinance, a common microfinance logo is also expected to be developed.

"Financial institutions which offer microfinancing will display this logo at their branches so that the public will know which financial institutions offer microfinancing," he said.

The borrowers meanwhile will be encouraged to display the logo at their business premises to indicate that they have successfully obtained financing from financial institutions to grow their business.

-- BERNAMA