Pre-Budget 2015: 'Give SMEs incentives to ensure continuity'

The discussion involves two SMEs -- Agro Jerneh Sdn Bhd and iFactors Sdn Bhd -- that represent the food industry as well as oil and gas.

Joining them is SME Corporation Malaysia in representing the government agency responsible for overseeing the development of SMEs.

In the discussion, it was noted that SMEs make up 90 percent of the Malaysian economy and is considered the backbone to the country's growth.

The sector is expected to contribute 40 percent to Malaysia’s gross domestic product (GDP), higher than the current 33 percent.

However, it might be difficult for SMEs to achieve that target as they face certain constraints such as lack of finance for expansion, research and development, and also the need for expertise in exporting goods and services.

Agro Jerneh managing director, Mohsein Mohd Sharif said the upcoming Budget 2015 should have provisions for incentives for innovative SME companies as there needs to be continuity.

He said there needs to be a system where innovative SMEs can be identified, and then given opportunities and incentives to keep growing.

As we approach 2020, the government needs to realise the importance of SMEs and if it is possible to reach its goals by 2020, he added.

"For Malaysia to reach its goals, universities and even GLCs (government-linked companies) should work together with SMEs to help the sector move forward," said Mohsein.

He hopes that Budget 2015 will explain the effects on SMEs, incentives for companies that implement minimum wage, and incentives for SMEs that work together with GLCs.

Submarine cable contractor, iFactor’s head of engineering, Kamaruddin Ismail agrees that there needs to be more funding for SMEs, particularly the services industry.

SME Corp deputy CEO (Implementation), Saifol Bahri Mohamad Shamlan, said for this year’s budget, SME Corp will be putting forward a four point wish-list to the government -- help to increase the number of innovative companies; raising productivity; easy access to financing, and access to the market.

He said most SMEs do not allocate a budget for marketing and this is usually why their products and services are not successful.

Saifol Bahri added that in today’s society, SMEs should look at marketing their products and services on social media as the outreach is vast and its free.