SMEs to contribute 40% to GDP next year

SHAH ALAM: Malaysia’s SME sector is expected to contribute 40% to the country’s gross domestic product (GDP) next year, Deputy Finance Minister Datuk Amiruddin Hamzah said on Dec 12.

Calling the target viable given the 37.8% achieved by the sector in 2017 and 38.3% last year, he noted: “In 2017, SMEs contributed RM491.2 bil to GDP and RM521.7 bil in 2018., so the target is achievable despite the global economic downturn.

“To realise the target, the government is committed to lifting barriers that hinder the development of SMEs, including information and access to financing.”

He was speaking after opening an SME Financing and Finance Clinic Seminar organised by Bank Negara Malaysia (BNM) here. Also present was BNM assistant governor Adnan Zaylani Mohamad Zahid.

Amiruddin considered the sector’s GDP contribution as still low, compared to the 60% to 80% achieved in developed countries.

Adnan Zaylani said BNM had organised 21 such programmes nationwide this year for about 10,000 local entrepreneurs, and as many as 85% of them said they had enhanced their knowledge and understanding through the programmes.

As the global economy moves towards more moderate growth, Malaysia’s economic position supported by strong fundamentals will continue to remain resilient, according to him.

“Our financing ecosystem is strong and functioning well. As at end-October, financing totalled RM314 bil or 813,000 SME accounts, with funding approval to 98,000 SME accounts in the first 10 months of this year amounting to RM59 bil.

“Various holistic measures and initiatives have been taken to further enhance the financing ecosystem and support the growth of SMEs including encouraging more innovations from financial institutions, improving the efficiency of the financing process, strengthening SMEs’ finances and improving credit guarantee products,” he said.

Acknowledging that some SMEs are still having difficulty in applying for financing, Adnan Zaylani said BNM and banking institutions would improve relevant aspects such as document requirements, supporting SMEs in financial management and new approaches in credit evaluation via alternative technology and data. – Bernama

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