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Assistance to SMEs

The following were FMM proposals to the Ministry of Finance for the 2012 Budget and Ministry of International Trade and Industry for the MITI Dialogue 2011:

  1. Provide affordable land and factory facilities to help SMEs operate in proper industrial areas, equipped with the necessary public amenities and safe supply of electricity and water. SMEs operating in proper industrial areas would have better access to various incentives and financing offered by the Government and financial institutions.

    The Government should build and offer flatted factories on lease so that SMEs are not burdened with heavy capital investments in property assets. Flatted factories would allow SMEs to expand as they grow without having to move onto new premises. Currently, SMEs industrial lots are too small and expansion capacity is severely hampered.

  2. Improve access to non-collateral based financing, especially for SMEs by strengthening the capacity and expertise of financial institutions in evaluating manufacturing projects, which require a longer gestation period and not asset rich as compared to construction projects, which have land as collateral and well established date of completion and returns. Capacity building is needed to train financial institutions in evaluating manufacturing projects, especially in green field industries, which have high potential, high returns, but also high risks and a longer gestation period.

  3. Government procurement and overseas projects handled by GLCs should emphasise Buy Malaysian, wherever possible to help promote and expand markets for locally manufactured products and services in export markets.

Submitted on April 29, 2011

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