Don't rely on govt subsidies to kickstart business, Bumis told

BUMIPUTERA entrepreneurs have been advised not to rely on government subsidies as their main resource to kickstart business.

Bank Perusahaan Kecil & Sederhana Malaysia Bhd (SME Bank) assistant vice-president and head of the business network management, Wan Baharudin Wan Ismail, said they should not continuously rely on the subsidies if they want to survive in today's competitive business world.

"For example, when we ask Bumiputera entrepreneurs to join a certain exhibition to promote their products, the first thing they ask is whether it is free," he said in an interview.

Wan Baharudin also dismissed claims that banks are being selective when disbursing loans.

"That is not the case. How do you expect us to approve their loans if we don't get complete applications? Some of them don't even have a proper accounting system to begin with," he said.

For Bumiputera graduates below the age of 35, who want to start a business, SME Bank offers loans up to RM250,000 under the Programme Inkubator Usahawan Siswasah (PIUS).

The loan comes with a 4 per cent interest per year. Wan Baharudin said SME Bank is working with the Higher Education Ministry to identify students who may be interested to participate in this programme and become entrepreneurs as soon as they graduate.

However, this loan is not given to those in the agricultural or fishing projects, which are categorised as "high risk".

A loan with PIUS does not require any collateral, but a guarantee letter from the applicants' parents or guardian.

Today, 199 Bumiputera graduates have benefited from the programme, which is conducted three times a year. - Business Times

8 local SMEs in Forbes `Best Under A Billion' list

EIGHT Malaysian companies are among the 200 small and medium-sized (SME) companies in the Asia Pacific that got into Forbes Asia's fifth annual "Best Under A Billion" list for 2009.

The companies are Coastal Contracts Bhd (marine transportation), Efficient E-Solutions Bhd (information technology outsourcing), ETI Tech (batteries), Hai-O Enterprise Bhd (cosmetics), Kumpulan Fima Bhd (food processing), NTPM (paper products), Success Transformer (electrical manufacturing) and YNH Property Bhd (palm oil).

According to Forbes Asia, the winners were culled from over 25,000 publicly listed companies with under US$1 billion (RM3.49 billion)in sales.

Four Malaysian companies - Coastal Contracts, Kumpulan Fima, NTPM and YNH Property - each recorded US$101 million (RM352.49 million) in sales.

Of the others, Hai-O Enterprise registered US$122 million (RM425.78million) in sales, Success Transformer US$53 million (RM184.97 million), ETI Tech US$24 million (83.76 million), and Efficient E-Solutions US$17million (RM59.33 million).

Forbes Asia said a third of last year's companies returned to this year's list, with all having either increased sales and profits over the past 12 months or were forecast to do so in the coming quarters.

It said that 78 companies from Hong Kong and China, or nearly 40 per cent, dominated the list, followed by Japan with 24 companies, South Korea (23), India (20) and Australia (18).

Apparel, media, technology and healthcare companies led the way on the list, it added.

Commenting on the list for the September 21 issue of Forbes Asia, writer Jack Gage said there were many survival stories in these 200 top companies whose lessons other entrepreneurs could learn from.

Gage said unprecedented dislocations in the global economy disrupted supply chains over the past 12 months, froze lines of credit, depleted consumer coffers and sent business spending into hibernation.

"The 64 companies returning from last year are a testament to fearless management and 136 new entrants have seized opportunities arising from the economic uncertainty," he said.

The 200 winning companies will be honoured at the Forbes Asia's "BestUnder A Billion" award ceremony in Singapore on November 11. - Bernama

Govt gives guarantee scheme RM2b more

THE government has allocated another RM2 billion for the Working Capital Guarantee Scheme (WCGS), to meet the overwhelming response from the public.

The scheme is administered by SME Bank, an agency under the Ministry of International Trade and Industry (Miti).

In a statement, Miti said the allocation was done through relocation of funds from the Industry Restructuring Loan Guarantee Scheme (IRLGS).

As of September 16, approvals given under the WCGS and the IRLGS by SME Bank are RM130 million, involving 51 applicants, and RM63.376 million, involving 11 applicants, respectively.

International Trade and Industry Minister Datuk Mustapa Mohamed, who was pleased with this development, urged the small- and medium-scale enterprises (SMEs) to make use of the facility provided by the government to enhance their products and business operations.

SMEs interested in applying for financing under the scheme can contact SME Bank branches for further details.

Under the second stimulus package, the government allocated RM10billion for the guarantee schemes to encourage bank lending, particularly for SMEs.

They included the WCGS, which is to enable Malaysian companies from all economic sectors to obtain loans ranging from RM50,000 to RM10 million for their working capital, with a guarantee from the government of up to 80 per cent of the loan.

The facility is made available to companies with equity holding of less than RM20 million. - Bernama

SME Corp loans, grants are now more industry-relevant

SME Corp Malaysia Bhd, which officially started its operations on September 1 2009, has streamlined its loans and grants for small and medium enterprises (SMEs) to make them more relevant to the industry.

The number of SME fund managers has also been trimmed to avoid overlapping and to enhance efficiency in the implementation of the funds.

SME Corp chief executive officer Datuk Hafsah Hashim said there are now 19 loans for SMEs compared with 53 previously, while the number of grants have been reduced to 14 from 26 previously.

"The rationalisation exercise does not affect the amount (funds) of grants and loans available for the SMEs. It is done to avoid duplication and make it easier to measure the outcome," she told Business Times in an interview.

SME Corp, which will maintain the responsibilities of former Small andMedium Industries Development Corp (Smidec) in SME development, is also mandated to coordinate all SME data and programmes, act as a referral centre for SMEs, manage information, and undertake research on SMEs.

Hafsah said the rationalisation will make the SME loans and grants easier to manage and ensure that the funds meet the needs of the SMEs.

SME Corp has also categorised the SME funds into eight groups, namely Bumiputera, manufacturing and services, agriculture, research and development, innovation and commercialisation, strategic industry, micro-credit, export market, and ideas-based.

She said the SME fund managers have been cut to six, from the previous 10 supervising agencies and 17 implementing agencies.

The six ministries that will manage the funds are the ministries of international trade and industry, finance, agriculture, domestic trade, cooperatives and consumerism, information communications and culture, and rural and regional development.

Hafsah said for this year, there have been 174 programmes for the SMEs with a RM3.4 billion allocation.

She also said that representatives from the ministries and banks will be housed under the same roof at its new office at Kuala Lumpur Sentral.

"We want to practise a no wrong-door policy. The SME Business Centre (to be located at the new office) will be a one referral centre for the SMEs," she said.

SME Corp also plans to set up a SME Central Park there, to meet the needs for incubators, packaging and design centres, marketing and distributon centre.

Hafsah said SME Corp is hiring more people to implement the agency's tasks and address the backlog cases of grants.

She said the agency has been receiving many applications during the economic crisis period, partly because banks have been more stringent.

Source :- Business Times

Agency to conduct analysis on impact of programmes

SME Corp Malaysia Bhd will measure the outcome of this year's 174 programmes for small and medium enterprises (SMEs) using an impact analysis framework of SME programmes.

Its chief executive officer Datuk Hafsah Hashim said the agency is working with a consultant to measure the short- and long-term outcome of the existing SME programmes as well as subsequent programmes.

"Some RM3 billion has been allocated to various ministries for 174 SME programmes this year. We want to measure the outcome of this allocation,"she said.

Hafsah said SME Corp will measure the outcome of the programmes and not just the output as is the current practice.

She said an output is when 200,000 people undergo training. The impact from the training is the outcome that the agency seeks to measure.

The impact analysis framework will be able to assess and monitor the effectiveness of SME development programmes by focusing on the needs, optimal resource utilisation and impact of the programmes.

"We will come out with a template measurement such as increase in turnover, productivity, sales and efficiency," she said.

She said through the framework, SME Corp would ensure that over 500,000 SMEs in the country benefit from government SME programmes.

"We want to have a bird's eye view on the programmes," she said, adding that the framework would ensure optimal resource allocation.

Hafsah said the outcome of all SME programmes implemented this year will be measured by year-end.

Over 560,000 SMEs are operating in the country. The contribution of the SME sector to the country's gross domestic product is expected to rise to 37 per cent next year from 32 per cent in 2005.

Source:- Business Times