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November 25, 2009 16:08 PM

SME Business Growing Moderately, Says SME Corp

KUALA LUMPUR, Nov 25 (Bernama) -- The performance and growth of small and medium enterprises (SMEs) are moderate with only a small number of them having fully recovered from the impact of the world economic crisis, SME Corporation Malaysia (SME Corp) chief executive officer Datuk Hafsah Hashim said on Wednesday.

She said a study conducted by SME Corp in July and August showed an improvement in terms of the perfomance of SMEs and that they were confident of registering better business growth in 2010, in line with the country's economic growth forecast of five per cent next year.

"The agency's study found that seven per cent of the respondents have fully recovered from the economic crisis and are hoping for a brighter shine in 2010," she told reporters after the launch of "MakeITwork" programme.

MakeITwork is a reality television programme on 10 business improvement projects involving growing SMEs that have been provided with information technology (IT) assistance and guidance for them to draw up a comprehensive business plan.

It will be shown at 7.30pm every Wednesday on NTV7 from tonight.

Another SME Corp study in the first quarter of 2009 revealed that 21.6 per cent of local SMEs had been badly affected by the global economic slowdown.

"The respondents also stated that the issue of payment delays from big companies to SMEs that was a major issue at the end of 2008 and early this year, has now become a third issue.

"It shows a solution to this problem is already there," Nafsah said.

She said SME Corp constantly assisted SMEs to enhance their ability in handling the economic crisis and was sure that local SMEs would be more prepared to expand their business and penetrate new markets when the economy recovered.

Nafsah also urged SMEs to enhance the use of IT, not only in administration, but also in terms of integration in business.

According to a Multimedia Development Corporation study, she said, 53 per cent of respondents stated they did not have company websites even though over 90 per cent of them knew how to use the internet.

"There are still local SMEs that are less aware that the use of IT can actually help them increase productivity and performance and bring more profits," she said.

Asked whether the definition of SME should be changed, Hafsah said SME Corp and the Statistics Department would conduct a census in 2011 to see the need for it.

Presently, SMEs in the services, primary agriculture and Information & Communication Technology (ICT) sectors are enterprises with full-time employees not exceeding 50 OR with annual sales turnover not exceeding RM5 million.

SMEs in the manufacturing sector (including agro-based) are enterprises with full-time employees between five and 50 OR with annual sales turnover between RM250,000 and RM10 million.

The SME sector makes up 90 per cent of all companies in Malaysia and has more than 5.6 million workforce.

-- BERNAMA

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