SMEs Corp Perak Director, Mohamd Rozlan: Pivotal role of SMEs

CEO of SME Corp., Perak Branch
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Relatively low manpower cost, land prices and rents, coupled with the fact that some 63% of the state’s population is educated, the availability of skilled, passionate and productive workforce all conspire together to play an auxiliary role in spearheading the state’s economic development.

SMEs have been playing a very important role in the economic development of many Asia-Pacific countries. Malaysia is no exception. SMEs contributed about 33% of Malaysia’s gross domestic product in 2013, and provided about 57% of employment opportunities for the labor market as well as 19% of the country’s total exports.

SME Corp Perak state director Mohamad Rozlan Mohamad Razalli: SMEs will play an important role as the next wave locomotives to spearhead the national economy.
SME Corp Perak state director Mohamad Rozlan Mohamad Razalli: SMEs will play an important role as the next wave locomotives to spearhead the national economy.

According to a 2011 survey, SMEs made up approximately 97.3% of all businesses in Malaysia.Perak is the state with the fourth highest percentage of SMEs in the country, numbering 60,028 among the 645,136 SMEs in the country, or about 9.3% of the national total.

SME CORP provide various facilities to SME operators.
SME CORP provide various facilities to SME operators.

SME Corporation Malaysia (SME Corp) Perak state director Mohamad Rozlan Mohamad Razalli says the federal government is anticipating that SMEs will play a pivotal role as the next wave locomotives of national economy, adding that their contribution towards the national economy will increase further.

“Perak is strategically located between Selangor and Penang, and although the state pales by comparison to these two more developed states in terms of competitiveness, it can absolutely play a complementary role. For instance, it can serve as a production or logistic base for the existing electronic manufacturers in Penang or emerging green technology operators.”

 

Business-friendly advantage

Compared to neighboring Selangor and Penang, Perak has an edge in the cost of doing business, such as lower manpower cost, land prices and rents. Moreover, about 63.2% of the state’s total population is fairly educated, skilled, passionate and productive employees.

According to the 2011 survey, among the 60,000 SMEs in Perak, 88% were in the service industry, including hotels, tuition centers, hair saloons, vehicle repair workshops, restaurants and cafes, among others. This percentage is in line with the national average of 91.7% for service industry among the SMEs, and is in conformity to the federal government’s initiative to promote theservice industry as an important engine to spearhead the national economy.

Meanwhile, the manufacturing industry is made up of 6.4%, mainly involved in the production of specialties of Ipoh such as groundnut, fragrant biscuits, white coffee, kacang putih, curry paste, etc. Some of these products have carved themselves good reputation overseas and are marketed throughout the world.

SME Corp Perak, which is tasked with the mission of promoting the growth of SMEs in the state to become export-capable, is pinning on the hopes that SMEs in the state can upgrade themselves through improved packaging, R&D and the production of unique, high quality products and change their existing modes of operation while reinforcing management, market analysis and other skills to become truly competitive enterprises.

Effective January 1, 2014, the National SME Development Council has redefined SMEs in the country as follows:

 

Type Manufacturing Service and other industries
Medium-sized Annual turnover between RM15 million and RM50 million, or number of full-time staff between 75 and 200. Annual turnover between RM3 million and RM20 million, or number of full-time staff between 30 and 75.
Small-sized Annual turnover between RM300,000 and RM15 million, or number of staff between 5 and 75. Anual turnover between RM300,000 and RM3 million, or number of staff between 5 and 30.
Micro-sized Annual turnover below RM300,000, or number of staff below 5. Annual turnover below RM300,000, or number of staff below 5.

 

Incentives and loans provided by SME Corp:
Incentives and loans are provided by SME Corp in a bid to help local SMEs to register more robust growth in their businesses. As of February 28, 2015, the SME Corporation Malaysia has already disbursed a total of RM4.7 billion in incentives and low-interest loans, of which the SMEs in Perak have been granted more than RM176 million or about 3.7% of the total amount.

 

Projects/financial assitance Number of projects approved Amount approved (RM million)
Business Accelerator Program (BAP) 28 0.87
Enrichment & Enhancement Program (E2) 20 1.04
Soft Loan for SME (SLSME) 151 109.98
Soft Loan for ICT (SLICT) 6 1.31

Source: SME Corp Perak

For more details about the incentives and loans,
please visit http://www.smecorp.gov.my