Adopt policies friendly to business owners, SME rep tells PM

The capacity of the small- and medium-enterprises (SMEs) in Malaysia can be improved if the government introduces policies that are friendly to business owners.

SME Association of Malaysia national secretary-general, Chin Chee Seong, said the authorities should make it easy for business owners to seek help.

“SME Corp, for example, is supposed to help our sector. But in order to receive help, one must first register as a member, and this entails submitting a list of documents, including the company’s auditor’s report. This creates restrictions and makes it difficult for new start-ups with no records to seek assistance,” said Chin.

He also cited regulations under the Industrial Co-ordination Act 1975, which makes it difficult for smaller SMEs to grow.

While the Act was introduced to ensure an orderly and structured development and growth of the country’s manufacturing sector, under the legislation, only manufacturing companies with shareholders funds of RM2.5 million and above, or employing 75 or more full-time, paid employees, can apply for a manufacturing licence from the International Trade and Industry Ministry.

A manufacturing licence, according to Chin, among others, enables manufacturers to enjoy certain benefits, including being able to apply for grants, enjoy cheaper electricity rates, and tax exemptions.

“Such a policy does not help smaller SMEs. The government should allow businesses with more than five employees to apply for manufacturing licences.

“We’ve raised this matter with the Malaysian Productivity Corporation, but have not heard from them since, Chin added.

Prime Minister Datuk Seri Anwar Ibrahim, earlier today, said government policies should focus on improving the capacity of the SME sector, as it is a pillar of the national economy.

In his speech during the Budget 2023 Dialogue Council in Putrajaya, Anwar said the sector has a very high potential and involves a large number of workers.

Chin admitted that government agencies do reach out to associations like his. However, he said more must be done to help SMEs be more productive.

SMEs have been recognised as the engine of Malaysia’s economy. Data, as of December 2021, indicate that there are more than 1.15 million SMEs nationwide.

The sector also contributes more than 38 per cent, or over RM500 billion, to the country’s gross domestic product (GDP).

“We need to grow. We need to have SMEs in Malaysia that can be as big as Samsung, for example. We have some big names, including Mamee, but are we doing enough to ensure that local brands can compete as global giants?” Chin asked.

He added business owners often feel that they don’t qualify for government assistance.

“To change this mindset, government agencies need to reach out directly to SMEs. They need to go nationwide and engage with us.

“While our association can help disseminate information, there are many unanswered questions that can only be addressed by those in authority,” Chin said.