Country Economic Work for Malaysia - Islamic Development Bank

successful programme in Malaysia has been the MYR2 billion SME Assistance Guarantee
Scheme which was established in February 2009 to ensure that viable SMEs, which were
adversely impacted by the economic slowdown, would have continued access to financing.
Under this scheme, SMEs are able to obtain financing with 80% guarantee cover provided by
the CGC. The cost of the guarantee was borne by the Bank Negara Malaysia. This scheme has
assisted about 10,000 SMEs from all sectors of the economy in sustaining their businesses
and preserving employment. 19
SME Master Plan: 2012 – 2020 Policy 20
99. The Government of Malaysia revealed the details of the SME Master Plan 2012-2020
that would create an ecosystem to accelerate the growth of SMEs towards achieving a high
income economy status. In line with this, the Government will ensure that the implementation
of the Plan will be a part of the Rural Transformation Programme (RTP), with main
objectives to modernise the rural areas, improve the infrastructure, and increase the income
level of the rural population. As a result of this implementation, rural area integration with the
economic main stream, rural entrepreneur involvement in the global supply chain and
economic activities that directly involve in inclusive innovation, can be achieved.
100. The SME Master Plan is an inclusive plan for all SMEs, across sectors, regions
(i.e. East Malaysia and rural) and strategic areas (i.e. Bumiputera and women). The Plan
proposes bold measures not only to develop champions but also to develop micro enterprises
to ensure balanced growth. In April 2011, the Council had endorsed the First Phase of the
Plan which comprised of the new SME development Framework and the broad policies and
strategies. Under the Plan, the Government is translating the policies and strategies into 32
key initiatives, including the Six High Impact Programmes (HIPs) that would contribute
significantly to achieving the targeted goals. The Plan will be built on existing initiatives
which has resulted in SMEs outperforming the overall economy in terms of value added,
employment and productivity growth. In the period 2004-2010, value added growth of SMEs
had consistently exceeded that of the overall economy to average at 6.8% versus 4.9% overall
GDP growth. These HIPs are being reinforced by other key initiatives including creating
demand for SME products through Government procurement; resource pooling to overcome
scale disadvantages; reducing information asymmetry; building capacity of SMEs and
specific measures for East Malaysia set the pace to achieve the following goals during the
period 2012 - 2020:
Increase business formation to facilitate a constant stream of new entrants into the
market (target of 6% per year increase in registration of new companies)
Expand the number of high growth and innovative firms (10% per year) as they
generate bulk of employment and output in the country
Raise labour productivity of SMEs from MYR47,000 per worker in 2010 to
MYR91,000 per worker in 2020
19 Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Langkawi International
Dialogue 2011: Innovative Financing for Transformation, Putrajaya, 19 June 2011.
20 Source: National SME Development Council, November 2011
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