Tuesday, August 08, 2006

79% of Malaysian SMEs are Micro enterprises

The results of the first comprehensive census on Malaysian SMEs are out.

An overwhelming 99% of firms surveyed are SMEs and though they obviously do contribute to the overall economy, their productivity levels are very low, recording value-added per establishment of RM0.3 million compared with RM41 million for large enterprises.

The other interesting fact is that many of these businesses are micro enterprises, hiring fewer than 5 employees. Understandably, they have greater challenges getting funding from financial institutions, which is why 84% of the SMEs relied on their own, or internally generated funds from friends and family members. In contrast, 50% of large enterprises turned to financial institutions.

The government's take-home points for the various sectors are:

Manufacturing: Upscale and transform businesses into strong knowledge intensive and value creating entities

Agro: Focus on development of "New Agriculture" including Biotechnology.

Wholesale & Retail Trade: Provide a comprehensive supporting infrastructure for businesses in this sector including provision of business premises and services. Hopefully the Ministry of Domestic Trade & Industry won't smother this vibrant industry by vigorously pursuing its agenda against those retail businesses with 15% foreign equity and forcing them to give 30% away to UMNO supporters.


Technorati tag: smes, Malaysia

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