KUALA LUMPUR: The development of small and medium enterprises has always been a high priority with 1.2 million SMEs making up 97.4% of business establishments, with their collective action bringing in multiple benefits ranging from environmental, conservation and economic growth, said SME Corporation Malaysia chairman Tan Sri Panglima Bernard Giluk Dompok.

“SAP segment contributed a total of RM518.4 billion to gross domestic products and RM144.5 billion to exports in the year 2020. The sector also employs a whopping 7.59 million workers,” he said at The Malaysian SME National Conference organised by KSI Strategic Institute for Asia Pacific today.

Bernard said SME Corp Malaysia has played a crucial role in spearheading SME development in Malaysia and believes the development of progressive SMEs is enhancing wealth creation and social well-being of the nation.

KSI Strategic Institute for Asia-Pacific executive vice-chairman Datuk Seri Dr Vaseehar Hassan Abdul Razack said that according to the 12th Malaysia Plan, SMEs are key economic drivers, emphasising the significance of prioritising sustainability in their business operations.

He added that sustainability is essential for SMEs in seeking to increase their long-term profitability and competitiveness. By prioritising sustainability in their business operations, SMEs can reduce operational expenses, enhance their brand’s reputation, and enter new markets.

Vaseehar said SMEs in Malaysia are vital to the country’s economy, accounting for 38.3% of the GDP and employing nearly 70% of the labour force.

“We are at a pivotal juncture where SMEs must adapt and evolve to thrive in an increasingly competitive global market,“ he stated.

Meanwhile, Bank Negara Malaysia (BNM) deputy governor Datuk Jessica Chew said BNM supports the development of SMEs as a long-standing priority.

As part of all efforts to promote an inclusive financial system, she said it is crucial to Malaysia’s long-term growth prospects, given the critical role that SMEs play in encouraging innovation and broadening economic participation through job creation.

“Financing to SMEs comprises almost half of the total outstanding business financing of banks, with a total of RM528 billion in total financing dispersed by banks into 2.28 million SME accounts, BNM has allocated a further RM32.4 billion in funds to further enhance access to financing for SMEs in strategic and new growth periods,” she said in her keynote address at the conference.

BNM has made progress in building a comprehensive system of support for financing SMEs after the establishment of institutions to coordinate SME development at the national level.

Asia Times