MONITORING, EVALUATING & COORDINATING MSME GROWTH IN MALAYSIA

In 2009, SME Corporation Malaysia (SME Corp. Malaysia) was appointed as the Central Coordinating Agency (CCA) for the overall development of SMEs in Malaysia. As the CCA, SME Corp. Malaysia is tasked to improve and enhance the coordination of data collation of MSME development programmes.

Acting in this capacity, SME Corp. Malaysia coordinates, streamlines, monitors and evaluates the progress and effectiveness of SME development programmes implemented by 15 Ministries and more than 60 Agencies (M&As) each year. This information, gleaned from the M&As, is then published as an annual SME Integrated Plan of Action (SMEIPA). This report had its debut as the SME Development Blueprint (2006-2008) prior to SME Corp. Malaysia being mandated as the CCA.

In essence, SMEIPA was designed to function as an integral and comprehensive document from which M&As derive relevant information to:

• drive enhancements and efficiency
• optimise fund allocations
• enhance collaboration and reduce duplication
• strategise policy planning
• map out future developmental programmes
• drive greater inter-Ministerial and Agency synergies
• identify and reduce duplication of resources

Key strategic committees have been formed to pool together the knowledge, expertise and talent of high ranking and experienced strategists to help steer the MSME growth in Malaysia. These committees in order of ranking are:

• The National SME Development Council (NSDC); and
• The High Level Taskforce for SME Development (HLTF).

Since 2004, the National SME Development Council (NSDC) has been the highest policy-making authority with its strategic functions that embodies the overall development of SMEs across all sectors of the economy in Malaysia. As greater emphasis is now placed on entrepreneurship development, the Council forges ahead with its rebranded name - the National Entrepreneur and SME Development Council (NESDC), announced and endorsed at its inaugural meeting on 8 April 2019.

The Council is made up of 20 prominent Members in relevant positions:

• Prime Minister as Chairman;

• Minister of Entrepreneur and Cooperatives Development;

• Minister of Investment, Trade and Industry;

• Minister of Finance Malaysia;

• Minister of Human Resources;

• Minister of Agriculture and Food Security;

• Minister of Domestic Trade and Cost of Living;

• Minister of Higher Education;

• Minister of Women, Family and Community Development;

• Minister of Communication and Digital;

• Minister of Science, Technology and Innovation;

• Minister of Economy;

• Minister of Plantation and Commodities;

• Minister of Tourism, Arts and Culture;

• Minister of Rural and Regional Development;

• Minister of Youth and Sports;

• Minister of Trade and Industry, Sabah;

• Ministry of International Trade, Industry and Investment Sarawak;

• Chief Secretary to the Government; and

• Governor of Bank Negara Malaysia

In pursuit of achieving the target of 41% GDP contribution by SMEs as outlined in the SME Masterplan 2012-2020, the Council had endorsed during the first NESDC meeting in 2019, eight (8) measures to further boost SME GDP annual growth, namely:

• Intensify digitalisation of SMEs
• Enhance SMEs integration in the supply chain
• Increase support to more high growth SMEs through relevant incentives
• Increase SMEs’ readiness and competitiveness in adoption of “innovative-disruptive-compelling” technology and business model
• Facilitate alternative financing for SMEs
• Recoup external SMEs value chain into the country
• To drive growth, strengthen uptake and promote export of home-grown payment gateway and fintech by SMEs
• Enhance SMEs participation in tourism industry.

Against the backdrop of challenging global and domestic economic environment, relative high cost of doing business and relatively high export performance of large firms versus SMEs, the macro target for both SME GDP and SME exports contribution was found to be highly optimistic and challenging. Hence, the Government had agreed to introduce additional macro targets for year 2020 and beyond:

• Annual growth target of SME GDP of between 6.0 - 8.0 % per annum; and
• Annual growth target of SME exports of between 5.5 - 7.5% per annum.

In addition, the Council had endorsed upon the proposed implementation of Government procurement policy framework for SMEs as well as the adoption of MSME status by SME Corp. Malaysia.

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