PETALING JAYA: The launching of the RM500mil syariah-compliant Commercialisation Innovation Fund (CIF) is a timely one that will spur the small and medium enterprise (SME) sector to be more innovative, but close monitoring of the fund is needed to ensure its effectiveness.
SMI Association of Malaysia new national president Teh Kee Sin said the move would enhance the level of innovation and technology in the sector moving forward.
“At present, there is less innovation in the SME sector partly due to the SMEs being wary to adopt technology and innovation in their businesses,” he told StarBizWeek in a telephone interview.
“The launching of CIF is a right step towards boosting innovation and productivity in the sector.”
He said the introduction of the fund was also timely in view of the recent minimum wage announcement, adding that minimum wage should be in line with innovation and technology.
Teh said the fund should be accompanied by its aggressive promotion and close monitoring. Bodies like SME Corp as well as non-governmental organisations should be aggressive in promoting the CIF to ensure SMEs are aware of such a fund and its benefits.
The efficacy of the fund would only materialise if it was closely monitored and the processes were not complicated for SMEs to understand, he noted.
Besides that, he hoped the Government would consider topping up the fund for SMEs to capitalise on it.
The CIF was launched on Thursday by Prime Minister Datuk Seri Najib Razak and was in addition to the RM2bil fund announced earlier byDeputy Prime Minister Tan Sri Muhyiddin Yassin on April 24.
The fund is designed to help companies in innovating products or services that are at the commercialisation stage and is open to all 1-InnoCert (a certification for innovative companies) firms with effect from July 1.
There are currently 1151-InnoCert-certified companies in the country.
SME Corp together with the Association of Banking Institutions Malaysia will manage and monitor the implementation of the fund via 13 Islamic financial institutions. Until the end of last year, financing of SMEs by Islamic financial institutions had increased by 17.1% to RM165.4bil.
Meanwhile, Associated Chinese Chambers of Commerce and Industry Malaysia SMEs deputy chairman Koong Lin Loong said there was no denying that the fund would enhance the innovation of SMEs and make them more competitive globally.
However, he felt it was only restricted to certain syariah-compliant activities of which SMEs might not be involved in as innovative activity covered a wider spectrum.
“To accelerate innovation among SMEs, the relevant government agencies should study and analyse the needs of this segment in order to have more relevant innovative activities, and to promote closer cooperation with the SMEs so as to foster a culture of innovation,'' he added.
