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BUDGET 2013 COMMENTARY
Thursday 04/10/2012
Budget 2013: A Government’s Continuous Commitment in the Development of SMEs
KUALA LUMPUR, Oct 4 (Bernama) -- The specific emphasis on a few strategic areas during the recent tabling of Budget 2013 by the Prime Minister, YAB Dato’ Seri Mohd Najib Tun Haji Abdul Razak, is what the rakyat have been looking forward to. The significant allocation in the development of Small and Medium Enterprises (SMEs) is a further manifestation that the government is sensitive and consistent in developing entrepreneurs. It is pleasing to note that an amount of RM2.25 billion has especially been allocated in the form of financing and implementation of many programmes for SME development.
The allocation includes four (4) funds to be managed by SME Bank, namely the SME Development Scheme amounting to RM1 billion, the Halal Industry Fund amounting to RM200 million, the Bumiputera Financing Fund to finance the acquisition of GLC subsidiaries amounting to RM1 billion and Young Entrepreneurs Fund amounting to RM50 million.
The huge allocation for the development of SMEs attests to the commitment of the government in ensuring SMEs drives the nation’s economic growth. The goal is for the SMEs to achieve a target of 41% contribution to the Gross Domestic Product (GDP) by the year 2020 as compared to 32% in the year 2010. This target has already been set in the SME Masterplan 2012-2020 which is deemed a ‘game changer’ by the Prime Minister. The target is both challenging but achievable.
It is even more critical in view of the impending economic crisis in Europe. The magnitude of the crisis calls for out-of-the-box solutions. Nonetheless, the country continues to be resilient in sustaining the direct impact due to all measures taken as result of our diverse market export policy and less focus on Europe. The state of our financial institutions and banking industry is also currently very strong following the many transformation steps taken by Bank Negara as well as learning from the 1997 financial crisis which resulted in a series of drastic changes to strengthen the national banking system.
Given the scenario, the focus on increasing demand in the domestic economic activity is seen as a highly strategic measure. This is where the needs and role of SMEs is called forth, in driving sustainable economic growth. The lingering question is however, the readiness of our entrepreneurs, especially the Bumiputera, in taking on the challenges in face of the generous offer and wide opportunities provided by the government.
SMEs are the source of domestic growth and the foundation to private sector activities in addition to playing an important role in stimulating service and manufacturing innovation. The SME Development Scheme with an amount of RM1 billion will be able to strengthen the SMEs towards achieving this role.
The Halal Industry Fund amounting to RM200 million will play a part in stimulating halal industry growth for export market purposes and is expected to hasten the internationalization of competitive SMEs in the global arena.
A huge challenge awaits our SME entrepreneurs in ensuring the production of high impact HALAL products. This simultaneously paves a way for access to the global market. Although the allocation was expected to be much higher, the seed fund is a good initiative by the government to enable the country to compete with others such as Thailand in the world halal industry and further pioneers the global halal hub industry.
The Bumiputera Financing Fund amounting to RM1 billion will assist Bumiputera SMEs in financing the acquisition of GLC subsidiaries to ensure equity holdings remains Bumiputera-owned. The participating SMEs will eventually have source of capital to carry out the above. This would be the most challenging task indeed in the context of capacity building and capability of our Bumiputera SMEs helming these companies and eventually achieving listing on the Bursa board.
Evidently, training programmes and professional consultation related to acquisition, management and corporate governance will have to be organized to realize the above goal, including post-acquisition programmes that focus on performance enhancement in view of the public listing process for the company.
Another interesting initiative in the recently announced Budget 2013 is the effort to intensify the establishment of business entities and encouraging our youths into exploring business as a career of choice. This will be driven by the Young Entrepreneur Fund amounting to RM50 million. This initiative for our youths as outlined needs support in terms of entrepreneurial training programmes, which has already been planned for and will be conducted by CED. Among others, the programme includes coaching/mentoring/industrial attachment and so forth with the assistance of some established successful entrepreneurs in order to expose and enhance these youths with real business management skills.
With these allocations for the specified industries, the more critical question remains in the ability of these SME entrepreneurs posessing the requisite of inner-drive, perseverence, commitment, focus and business acumen to seize the opportunity and be competitive in their respective area of business.
In perspective, it is evidenced that the government's seriousness and commitment in developing our SME entrepreneurs, especially the Bumiputera, is not seasonal but consistent. Acknowledging the lack of experience and exposure to business for this community, it is vital that activities and support services such as training, counseling, consultancy and other knowledge acquisition efforts be extended to ensure a holistic solution to the development of these budding entrepreneurs. This is where CED will play its role to complement the mandate and trust placed by the government upon SME Bank in achieving the nations’s aspiration of Vision 2020.
Centre for Entrepreneur Development (CED) of SME Bank envisions itself to be a global centre of reference for entrepreneur development and transformation. Our mission is to continuously develop the capability of entrepreneurs towards sustaining their business growth in support of the national economic agenda.
SOURCE : Centre for Entrepreneur Development (CED), SME Bank
FOR MORE INFORMATION, PLEASE CONTACT:
NAME : Mohamad Raffizal bin Mohamed Yusof
Assistant Manager, Corporate Communications & Branding
SME Bank
TEL : 03 - 2615 2987
FAX : 03 - 2698 1659
--BERNAMA
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