The document provides an overview of SMEs in Malaysia and the support provided by SMIDEC. It discusses the profile of SMEs including their contribution to the economy. It then outlines SMIDEC's role, organizational structure, functions and development programmes to address issues and challenges faced by SMEs such as access to financing, skills upgrading, technology adoption and market access. The financial assistance programmes aim to support SMEs at different stages of growth and sectors.

2. OUTLINE OF PRESENTATION
Profile of SMEs
About SMIDEC
Issues and Challenges
SME Development Programmes
Financial Assistance Programmes

3. PROFILE OF SMEs
Manufacturing, Services, Primary
Manufacturing Related Agriculture, Information
Services and Agro - And Communication
based Industry Technology (ICT)
Companies with annual Companies with annual
sales turnover not sales turnover not
exceeding RM25 million exceeding RM5 million
OR full time employees OR full time employees
not exceeding 150 not exceeding 50

4. PROFILE OF SMEs
4,136
LARGE (0.8%)
11,657
MEDIUM (2.2%)
95,490
SMALL (18.3%)
411,849
MICRO (78.7%)
TOTAL ESTABLISHMENT : 523,132
Preliminary Statistics by DOS - Dec 2005

5. PROFILE OF SMEs
Agriculture
Manufacturing
32,126 37,866
(6.2%) (7.3%)
Services
449,004
TOTAL SMEs : 518,996
(86.5%)
Preliminary Statistics by DOS - Dec 2005

6. PROFILE OF SMEs
523(2%)
Agriculture 1,618 (5%)
29,985(93%)
1,959(5%)
Manufacturing 14,955(39%)
20,952(56%)
9,175(2%)
78,917(18%) 360,912 (80%)
Services
0 100,000 200,000 300,000 400,000
Total Services : 449,004
Micro Small Medium
Total Manufacturing : 37,866
Total Agriculture : 32,216
Preliminary Statistics by DOS - Dec 2005

7. PROFILE OF SMEs
CONTRIBUTION OF SMEs
Output in the manufacturing sector (1996 – 2005)
100 40
90 30
80
20
70
RM billion
60 10
Per cent
50 0
40 -10
30
-20
20
10 -30
0 -40
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Output 51.5 55.8 49.4 58.5 59.7 60.9 62.8 68.5 75.2 82
Contribution 22.1 22.8 19.7 20.8 25.4 29.2 29.1 29.2 29.3 29.6
Year
NPC Calculated Survey 1996 - 2005 Output Contribution

8. PROFILE OF SMEs
CONTRIBUTION OF SMEs
Value added in the manufacturing sector (1996 – 2005)
20 40
30
16
20
RM billion
12 10
Per cent
0
8 -10
-20
4
-30
0 -40
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Value added 10.1 11.8 10.9 11.5 12 12.4 12.7 13.9 15.2 16.6
Contribution 19.5 22.6 19.8 20.6 23.6 26.9 25.8 25.7 25.7 25.9
Year
NPC Calculated Survey 1996 - 2005
Value added Contribution

9. PROFILE OF SMEs
CONTRIBUTION OF SMEs
Employment in the manufacturing sector (1996 – 2005)
450,000 35
400,000
25
350,000
300,000 15
No of Workers
Per cent
250,000
5
200,000
150,000 -5
100,000
-15
50,000
0 19 9 6 19 9 7 19 9 8 19 9 9 2000 2001 2002 2003 2004 2005
-25
E m plo ym e nt 3 2 9 ,8 4 3 4 7 ,9 4 3 14 ,7 6 8 3 2 5 ,15 6 3 5 1,2 7 1 3 6 3 ,7 7 3 6 2 ,3 4 3 7 4 ,6 4 3 8 4 ,9 3 3 9 4 ,6 7
C o nt ribut io n 2 9 .6 3 0 .7 2 8 .2 2 9 .3 3 0 .2 3 0 .5 3 1.6 3 1.3 31 3 1.1
Year
Employment Contribution
NPC Calculated Survey 1996 - 2005

10. ABOUT SMIDEC
Established under Parliamentary Act, 539 on 2nd
May 1996
Focal point for the overall development of SMEs in
the country
Provides capacity building programmes and
assistance through fiscal and non-fiscal incentives
VISION MISSION
ORGANISATIONAL FUNCTIONS
STRUCTURE

11. To be the Leading Organisation in
Developing SMEs that Contribute to
the Economic Growth and Enhanced
Competitiveness of Malaysia

12. To Transform SMEs to be Vibrant,
Competitive and Resilient and to be
Fully Integrated into the
Manufacturing and Services
Sectors

13. ORGANISATIONAL STRUCTURE
Corporate
Communications
Management
MINISTER Information System
OF INTERNATIONAL TRADE AND
Management
INDUSTRY
Services
Financial Assistance
& Monitoring
MEMBERS OF CORPORATION
Enterprise &
Entrepreneurship
Development
CHIEF EXECUTIVE OFFICER Strategic
Planning

14. FUNCTIONS
Promote, Coordinate and Implement Programmes for
the Development of SMEs
Forge Industrial Linkages Between SMEs and Large Companies
/Multinational Corporations (MNCs)
Implement, Coordinate and Monitor Financial
Assistance Schemes
Provide Technical and Advisory Support
Services
Collaborate with Other Local and International SME-
related Agencies

15. FUNCTIONS
SMIDEC
NEWSLINK
SME
Related Convention
Studies
PROMOTE, COORDINATE
AND IMPLEMENT
PROGRAMMES FOR THE
DEVELOPMENT OF SMEs
Enterprise 50
Promotional Award Programm
Activities
SMIDEC
Annual Showcase

16. FUNCTIONS
FORGE INDUSTRIAL
LINKAGES BETWEEN SMEs AND MNCs
INDUSTRIAL
LINKAGE
PROGRAMME
GLOBAL
SUPPLIER
PROGRAMME

17. FUNCTIONS
IMPLEMENT, COORDINATE AND MONITOR
FINANCIAL ASSISTANCE SCHEMES PROVIDED
TO SMEs
Soft
Grants
Loans

18. FUNCTIONS
Enhancement
Programme
PROVIDE SME Expert
TECHNICAL Advisory
AND ADVISORY Panel (SEAP)
SUPPORT
SERVICES
SME Information
& Advisory
Centre
Star Rating

19. FUNCTIONS
Participation in international
& regional cooperation
programmes
Attachment
Programme
COLLABORATE WITH OTHER
LOCAL AND INTERNATIONAL
SME RELATED AGENCIES TO
DEVELOP SMEs
Skills
Upgrading
Placement of
Programme
foreign experts
in selected
SMEs

20. ISSUES AND CHALLENGES
Impact of increased globalisation
and liberalisation
increasing competition
changes in structure of industries
require adjustments
Constant upgrading of processes
and product innovation to remain
competitive

21. ISSUES AND CHALLENGES
Competition from emerging economies
Greater outsourcing strategies by
MNCs
Changing the mindset and inculcating
the positive business values
Nurturing high growth and innovative
SMEs:
organic growth
inorganic growth (consolidation,
mergers strategic alliance)

22. ASSISTANCE PROGRAMMES IN LINE
WITH GROWTH OF ENTERPRISE
GLOBALLY
High COMPETITIVE
4. Maturity Stage
Technology
3. Expansion
Level
2. Growth
1. Start-up Stage
Low
Basic Requirements Time
/ Concerns
1. Start-up Stage 2. Growth 3. Expansion 4. Maturity
* R&D incubator * Certification/ * Technological * Design capability
Standard capability
* Adequate workforce * Brand name promotion
* Technical assistance * Management capability
* Market knowledge * Industry upgrading
* Automated Process * ICT capability
* Adequate raw * Investment abroad
material supply * Tax benefit * Brand development
* Adequate * Market Development * Venture Capital
infrastructure
* Outsourcing
* Distribution channels

23. DEVELOPMENT OF SMEs IN MALAYSIA
LOW TECHNOLOGY UTILISATION
LOW INVOLVEMENT IN R & D
ACTIVITIES
EMPLOYEES OF SMEs LACK
SOFT AND TECHNICAL SKILLS
LACK ENTREPRENEURSHIP CAPABILITIES

24. DEVELOPMENT OF SMEs IN MALAYSIA
Business and Market Development
Technology and ICT Adoption
Skills Development
Financial Assistance
Special Assistance Scheme for
Women Entrepreneurs
Outreach and Advisory Services

25. BUSINESS AND MARKET DEVELOPMENT
INDUSTRIAL LINKAGE PROGRAMME (ILP)
Integrating SMEs into the supply chain of the
MNCs and LSIs
Facilitating access to market
Promoting competitive and capable smes to
become suppliers to MNCs/LSIs
Providing opportunities to increase domestic
value-added

26. BUSINESS AND
MARKET DEVELOPMENT
ENHANCEMENT PROGRAMME
FOR SMEs
Support SMEs through comprehensive
programmes to enhance their
capabilities and capacity
Assist SMEs to meet quality standards,
regulations and technical specification
Focus approach & group project

27. BUSINESS AND
MARKET DEVELOPMENT
Provides platform to exhibit
products and services
Create opportunities to
be potential supplier/JV
Activities : exhibition, convention
and business matching
As outsourcing exchange

28. BUSINESS AND
MARKET DEVELOPMENT
REGIONAL TRADE
EXPOSITIONS
29-30 June 2006
Pulau Pinang Platform for SMEs to
exhibit products and
services
24-25 July 2006
Kuching, Sarawak
Opportunities for
companies to be
potential supplier
4-5 September 2006
Kota Kinabalu,
Sabah
Activities : exhibition
and business matching

29. BUSINESS AND
MARKET DEVELOPMENT
ENTERPRISE 50 AWARD
PROGRAMME
Prestigious Award 1996 - 2005
Recognise the
Achievement of Top 50 TOTAL NOMINATION : 1029
Enterprising Home
Grown Companies TOTAL ALUMNI : 370
LISTED ON MALAYSIAN
BOURSE : 40
Provide Opportunities
to Benchmark
LISTED ON MESDAQ : 1
Against Their Peers

30. BUSINESS AND
MARKET DEVELOPMENT
SME EXPERT ADVISORY
PANEL
EMPLACEMENT OF INDUSTRIAL
EXPERTS AT SMEs’ PREMISES TO
SOLVE SPECIFIC PROBLEMS
ASSIST SMEs TO UPGRADE THEIR
TECHNOLOGICAL CAPABILITY,
ACHIEVE EFFICIENCY AND
INCREASE PRODUCTIVITY
29 INDUSTRY EXPERTS
APPOINTED
AREAS :
ICT
FINANCIAL
ENGINEERING
MANAGEMENT

31. BUSINESS AND
TECHNOLOGY AND MARKET DEVELOPMENT
ICT ADOPTION
SMEs ARE ENCOURAGED TO ADOPT ICT AND
UTILISE REQUISITE TECHNOLOGY IN THEIR
BUSINESS PROCESSES
Grant for Product and
Process Improvement
Grant for Productivity and Quality
Improvement and Certification
Grant for Enhancing Product Packaging,
Design and Labelling Capabilities of
SMEs
Grant for RosettaNet Standard
Implementation
Soft Loan for ICT Adoption

32. SKILLS DEVELOPMENT
SKILLS GRANT FOR
UPGRADING ENHANCING
PROGRAMME MARKETING
SKILLS OF SMEs

33. SKILLS UPGRADING
21 SKILLS DEVELOPMENT CENTRES
APPOINTED

34. ENHANCING MARKETING
SKILLS OF SMEs
Assist SMEs to enhance
their employees’
marketing skills through
short-term courses
Training in areas such as
marketing strategies and
planning, pricing,
distribution, development of
brand, merchandising and
customer services

35. FINANCIAL ASSISTANCE
GRANTS
SOFT LOANS

36. 500,000
250,000
200,000
150,000
100,000
100,000
40,000
Matching Grant for Business Start-ups
Matching Grant for Product & Process Improvement
Matching Grant for Certification and Quality Management Systems
Matching Grant for Market Development
Matching Grant for Development and Promotion of Halal Product
Matching Grant for Enhancing Product Packaging
RosettaNet Standard Implementation

37. QUALIFYING CRITERIA
Companies incorporated under the Companies Act
1965 OR enterprises incorporated under the
Registration of Business Ordinance 1956
Fulfill definition of SMEs
At least 60% equity held by Malaysian
Possess valid premise license
SECTOR COVERAGE
Manufacturing
Services (Except Financial Services)

38. MATCHING GRANT FOR BUSINESS START-UP
Provides grant to assist SMEs in:
Preparation of Business Planning
Related Feasibility Studies
Rental of incubators and business premises up to
24 months
Rental of equipment and machineries
Development of prototype
Product sample and testing
Eligible Expenses :
Cost of consultation
Cost of acquiring skills and technology through
training and acquisition of relevant information

39. MATCHING GRANT FOR
PRODUCT AND PROCESS IMPROVEMENT
Provides grant to SMEs for improvement and upgrading
of existing:
Technology Feasibility Studies Development & designing of
equipment and machinery
Fees for technology transfer (e.g. (including jigs, moulds and dies as
technical licensing/ disclosure / well as ICT-related activities)
agreement/ acquisition and
blueprint/ drawing) Purchase of machinery and
equipment subject to maximum
Development of prototypes and matching grant RM100,000 per
system design application
Product testing Initial patent registration/patent
Product registration search/ IP Protection
Marking and labelling (e.g. Bar- Specific Project Mission (e.g. Mould
coding) & Die)
Machine & equipment testing and Cleaner Production and Waste
calibration Treatment Project including Energy
Efficiency Audit

40. MATCHING GRANT FOR PRODUCTIVITY
AND QUALITY IMPROVEMENT AND CERTIFICATION
Provides grant to assist SMEs in obtaining quality and product
certification such as:
ISO 13485, ISO 14000, ISO 22000 Occupational, safety and health manageme
Product certification system (OSHA)
Hazard Analysis Critical Control Point Restriction of Hazardous Substance (RoHS
(HACCP) Good Agriculture Practice (GAP)
Halal certification & MS1500:2004 Good Hygiene Practice (GHP)
TS 16949 Regulatory Impact Assessment (RIA)
Quality Improvement Practice e.g. 5S, Six- British Retailers’ Consortium (BRC)
Sigma and Productivity Audit Other related costs to comply to
Good Manufacturing Practice (GMP) requirements of standards and certification
Eligible Expenses :
Cost of technical expertise
Cost of acquiring technology and skills
Cost for testing and calibration
Cost of designing and prototyping
Survey cost for related schemes including registration
Cost of material used in designing prototypes

41. MATCHING GRANT FOR MARKET DEVELOPMENT
Provides grant to assist SMEs in undertaking activities for the
development of export markets. The activities include:
Participation in Trade and Investment missions, Specialized
Marketing missions and In-store Promotion
Export market study up to a maximum matching grant of RM30,000
Industry related conferences
Participation in local and international trade fairs
Participation in meetings related to negotiations on Mutual
Recognition Agreements (MRA), Free Trade Agreement (FTA),
ASEAN, World Trade Organization (WTO) and other market access
negotiations by representatives of Trade and Industry and
Professional Services Associations
Preparation of Promotional items up to a maximum matching grant
of RM15,000
Setting up of sales promotion office overseas up to a maximum
matching grant of RM50,000
For women-owned enterprises:
Participation in Malaysia Export Exhibition Centre (MEEC)
Participation in local export training seminars and workshops.

42. MATCHING GRANT FOR DEVELOPMENT
AND PROMOTION OF HALAL PRODUCT
“Oh mankind! Eat of that which is halal and tayyib on the earth, and follow not
the footsteps of Shaytaan.”
Verse 168 of Surah Al-Baqarah
Provides assistance to local companies in:
Product development & Product Formulation.
Sample testing.
Acquisition of machinery and equipment related to the
approved project subject to maximum matching grant
RM100,000.
Renovation expenditure for compliance to certification
requirement subject to maximum of RM100,000.Promotional
activities.
Other related costs for compliance to requirements of Halal
certification.

43. MATCHING GRANT FOR
ENHANCING PRODUCT PACKAGING, DESIGN
AND LABELLING CAPABILITIES OF SMEs
Designing and improving product packaging
and labeling through appropriate packaging
technology
Eligible Expenses
Related costs and services for designing, packaging,
marking and labelling
Trade mark and patent registration
Purchase of machinery and equipment subject to
maximum matching grant of RM100,000

44. GRANT FOR ROSETTANET
STANDARD IMPLEMENTATION
RosettaNet Direct Model RosettaNet ASP Model
Provides partial grant to
Assistance to local assist local companies to
companies to implement implement the RosettaNet
the complete RosettaNet Standard through
Standard subscription to hosted
services offered by
Enable companies to Application Service
implement and host their Providers (ASPs).
own RosettaNet Gateway Form of assistance:
infrastructure - For SMEs - 70% grant on
approved project cost
50% grant on approved
- For large companies -
project cost 50% grant on approved
project cost
Maximum grant per
company is RM100,000 Maximum grant per
company is RM30,000

45. HOW TO APPLY?
By mail:
701D, Level 7, Tower D, Uptown 5
No. 5, Jalan SS 21/39, Damansara Utama
47400 Petaling Jaya
Selangor Darul Ehsan
By fax:
603-7660 1919
On-line application:
www.smidec.gov.my

46. SOFT LOANS
SOFT LOAN FOR SMEs (SLSMEs)
Both existing as well as start-up companies are eligible for :
Project Financing
Fixed Asset Financing
Working Capital Financing
SOFT LOAN FOR FACTORY RELOCATION
Assistance to SMEs to relocate their factories to designated industrial
sites
The loan is provided to fund :
Purchase of ready-made factories
Purchase of factory lot and construction of factories including
related infrastructure
Costs to purchase related machinery and equipment due to
relocation
Costs incurred for initial store renovation and upgrade of store
display for retail trade

47. SOFT LOAN FOR ICT ADOPTION
Upgrading Engineering Design Capabilities
Purchase of design software or subscription fee/license
fee for on - line engineering design services
Purchase of computer hardware and related equipment
Training cost
Enterprise Resource Planning (ERP) Software
Purchase of ERP software or subscription to on-line ERP
system, or other similar software
Implementation cost including system study,
customisation and training
Purchase of server & related networking equipment

48. SOFT LOANS
Maximum Loan Interest Payment
Rate Period
SOFT LOAN FOR SMEs (SLSMEs)
Project Financing RM5 milllion
Fixed Asset Financing RM2.5 milllion 4% 15 years
Working Capital Financing RM1 milllion
SOFT LOAN FOR RM1 milllion 4% 12 years
FACTORY RELOCATION
SOFT LOAN FOR ICT ADOPTION RM250,000 3% 5 years
IMPLEMENTED BY :

49. OUTREACH PROGRAMMES
AND ADVISORY SERVICES
Outreach Programme
2005
Seminars and
Workshops
85 Seminars /
Provide information on
Workshops organised
related topics to SMEs
such as financial
assistance and Participated as speaker
management, marketing in 77 Seminar /
and P & Q Workshops
Total participants :
33,057

50. OUTREACH PROGRAMMES
AND ADVISORY SERVICES
Advisory Services
Provides advisory services and consultation
to SMEs through :
Toll Free Line : Business Advisory Virtual SME
1-800-18-1801 Services Information Centre