SME to contribute 40% to GDP next year

SHAH ALAM, Dec 12 -- Malaysia’s small and medium enterprises (SME) sector is expected to contribute 40 per cent to the country’s gross domestic product (GDP) next year.

Finance Deputy Minister Datuk Amiruddin Hamzah said the target was viable given the 37.8 per cent achieved by the sector in 2017 and 38.3 per cent, last year. 

“In 2017, SMEs contributed RM491.2 billion to the country's GDP and RM521.7 billion in 2018. Therefore the target is seen to be achievable despite the global economic downturn.

“To achieve the target, the government is committed to lifting barriers that hinder the development of SMEs, including information and access to financing," he told a press conference after opening an SME Financing and Finance Clinic Seminar organised by Bank Negara Malaysia (BNM) here, today.

Also present was BNM assistant governor Adnan Zaylani Mohamad Zahid.

Amiruddin considered the sector’s GDP contribution as still low, compared to the 60 to 80 per cent in developed countries.

Meanwhile, Adnan Zaylani in his address said BNM had organised 21 similar programmes nationwide this year. 

“An estimated 10,000 local entrepreneurs attended the seminar. As many as 85 per cent of the entrepreneurs said they had enhanced their knowledge and understanding through the programme,” he said.

As the global economy moves towards more moderate growth, Malaysia's economic position supported by strong fundamentals will continue to remain resilient, according to him.  

“Our financing ecosystem is strong and functioning well. As at end-October, financing totalled RM314 billion or 813,000 SME accounts, with funding approval to 98,000 SME accounts in the first 10 months of this year amounting to RM59 billion.

"Various holistic measures and initiatives have been taken to further enhance the financing ecosystem and support the growth of SMEs including encouraging more innovations from financial institutions, improving the efficiency of the financing process, strengthening SMEs’ finances and improving credit guarantee products," he said.

Acknowledging that some SMEs were still having difficulty in applying for financing, Adnan Zaylani said BNM and banking institutions would improve relevant aspects such as document requirements, supporting SMEs in financial management and new approaches in credit evaluation via alternative technology and data.

-- BERNAMA