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Government allocates RM70mil for SME programme [26-01-2011]  
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The Small and Medium Enterprises Corp Malaysia (SME Corp) and Small and Medium Enterprises (SME) Bank Malaysia will be allocated RM70mil under the new SME development programmes to enhance the capacity and capability of SMEs in the country.

“Most of it will be soft loans, we try to work on 50:50 ratio (50% grant and 50% soft loans) and gradually reduce the grant portion,” said Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed.

The two new SME development programmes, namely Business Accelerator Programme (BAP) and the Enrichment and Enhancement Programme (E2), are to ensure that the SME community is integrated into the mainstream economic development.

“About RM40mil will be allocated for BAP,” Mustapa told reporters at the signing of a memorandum of understanding (MoU) between SME Corp and SME Bank in conjunction with the announcement of the new SME development programmes here yesterday.

The signing of the MoU will formulate and further strengthen the cooperation between the two agencies under MITI in implementing the BAP.

“In the 10th Malaysia Plan and in realigning SMEs into the New Economic Model, the Government will adopt a differentiated approach to accelerate the growth of SMEs and to provide the impetus for growth led by the private sector.

“In the short term, this will include the adoption of outcome-based approach in monitoring and assessing the effectiveness of SME development programmes,” said the minister.

Meanwhile, business start-ups and micro enterprises will undergo the E2 and it will be made mandatory to undergo Micro-enterprise Competitiveness Rating for the E2.

In a separate press conference, SME Corp chief executive officer Datuk Hafsah Hashim said the financing part of these programme would be provided in a hybrid form via combination of grants and loans.

Commenting on the growth of SMEs, he said the sector was estimated to contribute 35% to the gross domestic product (GDP) of Malaysia by 2020.

Last year, SMEs’ value-added growth was projected to expand between 8% and 8.5%, while the overall economy is projected to grow at 7%.

“This is a very important indicator to show that the SME community has recovered from the recent economic crisis and we believe that for the first half of 2011, they will continue to grow,” said Habsah.

From 2004 until 2009, the value added growth of SMEs had consistently outperformed that of the overall economy, averaging at an annual rate of 6.3% compared to 4.5% for the country’s overall GDP growth.

“We hope that by putting in more structured and organised programmes, it will benefit the SME industry in terms of growth,” she added.

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