The National SME Development Council (NSDC) was established in June 2004, with Bank Negara Malaysia appointed as its Secretariat. Chaired by the Prime Minister, with representation from Ministers and Heads of 19 key Ministries and Agencies involved in SME development, the NSDC serves as the highest policy-making body to set the strategic direction for the Government policies on SME development so as to ensure coordination and effectiveness of Government programmes.
The NSDC convenes bi-annually to deliberate on strategies and new policies to support SME development across all sectors, as well as to monitor and evaluate the progress and effectiveness of SME policies and programmes in promoting the growth and development of SMEs.
TERMS OF REFERENCE OF THE NSDC
• Formulate broad policies and strategies to facilitate the overall development of SMEs across all sectors;
• Review the roles and responsibilities of Government Ministries and Agencies responsible for SME development;
• Enhance cooperation and coordination, as well as guide Ministries and Agencies to ensure effective implementation of SME development policies and action plans;
• Encourage and strengthen the role of the private sector in supporting the overall development of SMEs; and
• Provide emphasis to the development of Bumiputera SMEs across all sectors of the economy.
STRATEGIES FOR SME DEVELOPMENT
In order to increase SMEs’ contributions to the economy, the main thrust of SME development efforts are aimed at:
• Strengthening the infrastructure for SME development;
• Building the capacity of domestic SMEs; and
• Enhancing access to financing by SMEs.
INITIATIVES APPROVED BY NSDC
In line with the three-pronged strategy, NSDC has begun several initiatives since its inception.
Strengthening the Infrastructure for SME Development
• Establishment of a comprehensive National SME Database by the Department of Statistics Malaysia. This gives a clear picture of the status and development needs of SMEs across all sectors, and helps monitor the effectiveness of SME development policies and programmes.
• Introduction of standard definitions for SMEs.
• Adoption of the SME Policy Formulation and Evaluation Framework for greater coordination and focus in the formulation and implementation of SME policies and programmes.
Building the Capacity of Domestic SMEs
• Appointment of Pembangunan Sumber Manusia Berhad (PSMB) as the central coordinating body for SME development.
• Launch of an online Human Resource Development Portal to encourage and help employers, particularly SMEs, to retrain and upgrade the skills of their employees.
• Introduced new ways to improve the marketing and promotion of SMEs and their products.
Enhancing Access to Financing by SMEs
• Establishment of the SME Bank to provide SME-specific loans and advisory services.
• Introduction of the securitisation of SME loans to encourage further lending by financial institutions to SMEs.
• Introduction of new trade financing products for SMEs to encourage SMEs to export their goods and services to non-traditional markets, especially to member countries of the Organisation of Islamic Conference.
LATEST KEY INITIATIVES FOR SME DEVELOPMENT
The NSDC, during its eighth meeting on 2 June 2008, reported several milestones and endorsed several key initiatives to further promote a competitive and resilient small and medium enterprise (SME) sector:
• More than 286,000 SMEs assisted through development programmes in 2007
• Financing channeled to SMEs by financial institutions have exceeded 2007 targets: RM63.2 billion financing approved to more than 132,000 SME accounts
• National SME Development Blueprint 2008: 198 key programmes with financial commitment of RM3.2 billion to assist SMEs in 2008
• Formation of dedicated SME Central Coordinating Agency (SME Agency)
• Moving SMEs towards higher value-added economic activities
• Special Committee to Recommend Measures to Reduce Impact of Rising Prices on SMEs
FORMATION OF SME CENTRAL COORDINATING AGENCY
The NSDC agreed to establish the SME Central Coordinating Agency, a single dedicated Government agency to spearhead the development of SME across all sectors of the economy. The Small Medium Industry Development Corporation (SMIDEC) will be transformed to become the SME Central Coordinating Agency.
The establishment of the Agency reflects the Government’s strong commitment in promoting the development of entrepreneurship and SMEs in Malaysia. This is a key initiative aimed at accelerating the development of the SME sector by providing greater focus in formulating strategies and implementation of programmes for SMEs.
The Agency will collaborate with the relevant Ministries and Agencies to ensure that comprehensive policies are in place, as well as coordinate and synchronise implementation of SME programmes across all sectors and Agencies.
The Agency will provide a one-stop information and advisory services to SMEs. This single point of contact and reference will make it much easier for SMEs to obtain comprehensive and up-to-date information on all programmes and provided by the Government assistance, as well as advisory services. This will significantly enhance the delivery of Government programmes and advisory services to SMEs. In addition, the Agency will monitor the performance of SMEs, towards developing appropriate policy response.
The SME Central Coordinating Agency will be placed with the Ministry of International Trade and Industry, but will report to the National SME Development Council. Necessary financial and non-financial resources will be provided by the Government to ensure that the Agency can perform its roles effectively.
The NSDC believes that the establishment of the Agency will accelerate the development of the SME sector through better coordination and effective implementation of SME programmes. The Agency will have a key role in achieving the target set by the NSDC to increase SME contribution to the economy from 32% in 2005 to 37% of gross domestic product by 2010.
HANDING OVER OF NSDC’S SECRETARIAT FUNCTION TO SMIDEC
On 24 July 2008, Bank Negara Malaysia announced the official handover of the NSDC’s Secretariat function to SMIDEC. With expanded functions, SMIDEC will be transformed into the SME Central Coordinating Agency and will be known as SME Corporation Malaysia (SME Corp).
SME Corp will continue the role of the Secretariat in undertaking the overall coordination of SME policy formulation and assessment of the performance of SME development programmes across all sectors. SME Corp will also serve as the central point of information, reference and advisory services for SMEs. It will begin its operations on 2 January 2009.
The establishment of a dedicated SME Agency represents a major structural enhancement to the SME development agenda towards the development of competitive and resilient SMEs.