Better incentives for SMEs

SEVERAL incentives for small and medium enterprises (SMEs) will be enhanced beginning next month, to make these companies more competitive and resilient, International Trade and Industry Minister Tan Sri Muhyiddin Yassin said.

He said the incentives were improved upon to address four major issues faced by SMEs in both the manufacturing and services sectors.

"These issues include upgrading of technological capabilities, market access, access to finance, and human resource development," Muhyiddin told reporters after a visit to furniture maker Edu World Services Sdn Bhd's factory in Sungai Buloh yesterday.

Effective June 1 2008, the matching grant for SMEs that undertake skill upgrading programmes will be increased from 50 per cent to 80 per cent, the minister said.

"This means if the SME spends RM100,000 for upgrading of skills, we will now provide RM80,000," Muhyiddin said.

The matching grant for business start-ups has also been increased from a ceiling of RM40,000 to RM100,000.

These refer to funds used to buy machinery or office equipment (for the services sector only), one-year broadband subscription fee for the ICT sector and a grant-loan facility to fund operating expenses.

Under the matching grant for product and process improvement, the cap on purchase of machinery and equipment has been increased from RM100,000 to RM200,000.

For SMEs looking for certification and quality management systems, Miti has expanded its qualifying criteria to include enterprises in the services sector and to include ISO 9000 series for all sectors. The ISO 9000 series was previously only given to professional services.

An SME can now also benefit from the market development grant for up to five years or a maximum of RM100,000, whichever comes first.

Muhyiddin said the incentives were improved upon following a review by the Small and Medium Industries Development Corp (Smidec).

He said Smidec has also created 10 new SME packages, which will only be revealed in two weeks' time.

With over RM400 million of Smidec's funds utilised by SMEs under the Ninth Malaysia Plan, Muhyiddin said Miti was looking into requesting for an additional funding of RM500 million to support over 550,000 SMEs.

The government has allocated close to RM8 billion to fund the development of SMEs, which not only creates jobs but contributes to the country's economy.

SMEs currently contribute about 35 to 36 per cent to the country's gross development product.

Source: http://www.btimes.com.my/Current_News/BTIMES/Wednesday/Nation/jmuy6.xml/Article/