TARGETING SME GROWTH: Awang Tengah (second right) going through some documents prior to the press conference. Also seen are Julaihi (second left) and Liaw (right).
KUCHING: A proposal has been made to the federal government that at least 10 per cent of grants and loans for the development of small and medium enterprises (SME) is allocated to Sarawak each year to help it develop local entrepreneurs here.
Based on statistics from SME Corporation, only 2.1 per cent of grant applications (362) was received from SMEs here from 2008 to September last year out of the total of 17,440 applications received from throughout the country.
Of the lot, 355 applications were approved for grants that totalled up to a mere RM10.92 million, representing only 2.3 per cent of the RM461.68 million granted to SMEs throughout the country.
This situation has led Industrial Development Minister Datuk Amar Awang Tengah Ali Hassan to call for more awareness on the availability of funds to help SMEs grow in the state.
“The state has written to the International Trade and Industry Minister Datuk Seri Mustapa Mohamed regarding the matter. We have also stated that if the allocation is not fully exhausted, the federal government can take the fund back to be offered to SMEs in other states.
“Grant approvals, implementation of aid and dissemination of information have always been the main issues here, with geographical conditions and logistics the main contributing factors,” the second minister of resource planning and environment told a press conference in his office at Wisma Sumber Alam near here yesterday.
Also present were Assistant Minister of Investment and Promotion Julaihi Narawi and permanent secretary Datu Liaw Soon Eng.
He further said that applications for loans for small and medium industries (SMI) offered by the Malaysian Industrial Development Finance Bhd (MIDF) in the state was only 9.7 per cent (145 applicants) out of the 1,490 applications received throughout the country.
Of the number, he said 97 applications (67 per cent) were approved for a total amount of RM74.5 million, which he deemed too low considering that it only constituted about six per cent of the total amount of RM1,248.4 million approved to SMEs throughout the country.
Earlier, Awang Tengah chaired a meeting on ‘Strategic Partnership between SME Bank and Ministry of Industrial Development’ with representatives from SME Bank led by its second deputy president (Liaison and Networking) Wan Baharuddin Wan Ismail at his office.
Transpiring from the meeting, SME Bank proposed that a strategic relationship be established between it and the ministry.
It said the strategic relationship would enable it to set up a financial and non-financial service package to SMEs in the state that had been given manufacturing permits by the Industrial Coordination Committee (ICC).
Besides that, it would also allow it to structure a managed lending programme (PML) to fund entrepreneurs like contractors, vendors and suppliers.
Since operating here in 2005, SME Bank branches in Kuching and Miri had shown positive growth in the approval rate for financing at RM869.19 million to 396 entrepreneurs.
Last year, it approved RM142.21 million to 52 entrepreneurs here. Based on this achievement, the bank has set a target of approving RM372.5 million this year, an increase of 262 per cent for the state.
SMEs account for a large portion of businesses in Malaysia. The services sector accounted for 87 per cent while the manufacturing sector is seven per cent. The remaining six per cent is in the agriculture sector.
Besides SME Bank, other agencies that provide financial aid and grants to SMEs are the state Industrial Development Ministry, SME Corp. Malaysia and MIDF.
