The measures introduced in Budget 2013 for the small and medium enterprise (SME) sector has set the path for further growth of the sector and will complement existing measures to expedite growth.
SMI Association of Malaysia national president Teh Kee Sin said that overall the proposals in the budget were good for the industry and were in the right direction for future growth.
“By expanding the scope of financing, the allocation of funds to this sector will be more effective and expedite the objective to help SMEs meet funding needs. This move will allow them to expand their businesses locally and abroad and contribute to the country’s wealth,’’ he told StarBizWeek.
The budget, among others, has proposed a fund of RM1bil that would be provided under the SME Development Scheme to be managed by the SME Bank to facilitate SMEs’ access to financing.
Teh applauded the move to provide RM200mil to the Halal Industry Fund as he felt the move would facilitate Malaysia to become a global halal centre as well as assist those SMEs in the halal industry to expand their businesses.
SME Corp Malaysia CEO Datuk Hafsah Hashim said apart from monetary incentives, what was interesting this time round was that the budget included incentives for angel investors and usage of intellectual property rights (IPR) as collateral.
“These incentives will spur innovation in the country, especially among innovative firms as they can now scale up their capabilities using IPR as a collateral to get bank loans as well as encourage angel investors to take up equity in their companies.
“Both these incentives are also very much in line with our goal in the SME Masterplan where we target to increase the number of high growth and innovative firms to chart higher growth from SMEs during the plan period (2012-2020),’’ she added.
A valuation model would be created to enable IPR to be valued and commercialised in the market as well as utilised as collateral to obtain financing from financial institutions. The following initiatives would be implemented for this purpose:
*Establishment of an Intellectual Property Financing Fund scheme amounting to RM200mil. The scheme will be offered through Malaysian Debt Ventures Bhd. The Government will provide a 2% interest rate subsidy and guarantee of 50% through Credit Guarantee Corp Malaysia Bhd (CGC); and
*Allocation of RM19mil for training programmes for local intellectual property evaluators conducted by Intellectual Property Corp of Malaysia as well as creation of an intellectual property right market platform.
Meanwhile, CGC managing director Datuk Wan Azhar Wan Ahmad felt there were sufficient funds available in the market and it was a question of bankability of SMEs rather than the lack of funds that needed to be addressed.
The biggest challenge for the SMEs today was to present themselves as bankable, meaning having good credit standing and track record, he said, adding that the SMEs have to concentrate on improving their track record and credibility to gain access to these funds.
“At the same time, the Government could also consider offering some incentives to encourage them to undertake measures to improve on their credit standings and bankability to further enhance their access to the available funds, ‘‘ he said.
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