The Malaysian Experience - Astana Economic Forum

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10 Νοε 2013 (πριν από 4 χρόνια και 3 μέρες)

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23 May 2013

SECTION 2:

The infrastructure to support the
development and expansion of foreign
economic activities of Kazakhstani SMEs

VI ASTANA ECONOMIC FORUM

Kazakhstan

Development Financing of SMEs


The Malaysian Experience


by


Mohamad Sabir Mohamad Sabri

SME BANK MALAYSIA

2

Overall Financial Landscape


Comprehensive

financial

landscape

for

SMEs

with

diversified

sources

of

financing

providers


Banking

institutions

are

the

main

source

for

SME

banking



90
%


DFIs

are

specialized

institutions

established

and

funded

by

the

government

for

strategic

sectors


3

Perspective of DFIs in Malaysia


DFIs

are

specialised

FIs

established

by

the

Government

with

specific

mandate

to

develop

and

promote

key

sectors

that

are

considered

of

strategic

importance

to

the

overall

socio
-
economic

development

objectives

of

the

country


The

strategic

sectors

include

agriculture,

small

and

medium

enterprises

(SMEs),

infrastructure,

maritime,

export
-
oriented

sector

as

well

as

capital
-
intensive

and

high
-
technology

industries


The

are

13

DFIs

in

the

country

of

which

6

are

prescribed

under

the

Development

Financial

Institutions

Act

2002

and

supervised

by

the

Central

Bank

Role and functions in providing focused financial and development support to
bolster human CAPITAL development, SOCIO
-
ECONOMIC AGENDA and
economic growth

Unique Individual Mandate

DFI

MANDATE

Development Bank of Malaysia (
Bank
Pembangunan Malaysia Berhad)

Providing financial services focusing on capital intensive
industry
ie
. infrastructure projects, maritime & hi
-
tech sector

SME Bank Malaysia
(Bank Perusahaan
Kecil & Sederhana Malaysia Berhad)

Providing financing and advisory services activities to SMEs
involved in manufacturing, services and construction sectors

Export
-
Import Bank of Malaysia Berhad
(EXIM)

Providing facilities to support exports & imports of goods,
services and overseas investments

Agro Bank Malaysia
(Bank Pertanian
Malaysia Berhad )

Providing full range of financial services focusing on
agricultural sector

Co
-
operative Bank
(Bank Kerjasama
Rakyat Malaysia Berhad)

Provide financing and accept deposits as well as producing
satisfactory dividend for its members (co
-
operative)

National Savings Bank
(Bank Simpanan
Nasional)

To encourage savings, investments and smart financial
management among Malaysians to increase quality of life

The remaining 7 entities which are not governed by the Central Bank have their
own respective specific mandates

5

Government’s Agenda


10MP and ETP

SME Growth
vs.
GDP Growth (
2001
-
2011)

In efforts to promote
Malaysia as a high
-
income
nation by 2020, the
Government targets to grow
SME industry’s contribution
to the nation’s GDP to
41%
in
2020.

33%
33%
34%
35%
36%
37%
38%
38%
39%
40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total SME contribution to GDP (2011
-
2020)
SME Bank will
provide
funding
assistance to
businesses

that are in the
Development
and Growth
stage

5.1

6.0e

6


The Master Plan charts the policy direction of SMEs in all sectors through the year 2020
towards achieving a high income nation in line with the New Economic Model (NEM)


Phase I: new SME Development Framework and broad policies and strategies to
achieve the NEM goals;


Phase II: Master Plan is to look into the specific action plans and the monitoring
mechanism

Government’s Agenda
-

SME Master Plan (2012
-
2020)

Innovation and
technology
adoption

Access to
financing

Intensify
formalisation

Access to
market

Legal and regulatory
environment

Infrastructure

Human capital and
entrepreneurship
development

Increase
business
formation

Expand number
of high growth
and innovative
firms

Raise
productivity

Focus Areas

Strategic Goals

SME Bank Malaysia


Vision and Mission

7

To Be A Full
-
Fledged
Specialised Financial Institution
To Nurture Small Medium
Industry Enterprise For Nation
Building

To Support Government’s
Economic Agenda In
Developing SMEs As An
Engine Of Growth

&

Shareholding and Reporting Structure

8

MOF Inc.

Central Bank
of Malaysia

MITI

SME
Bank
Malaysia

Supervising

Ministry


Shareholder

100% owned


Regulator

Under DFIA 2002


SME Financing


Manufacturing
sector


Services
sector


Construction
sector




Authorized Capital
RM5.0 billion


Paid up Capital
RM1.35 billion


9

Main Roles


Integrated Approach

MEDIUM

SMALL

MICRO

Small Medium Enterprises (SMEs)

Development

Banking


High Impact Developmental

Program Through

Synergized Approach of

Financial Assistance

and Intervention


Financial assistance

serves as enabler

for SMEs, as

engine of growth, to

move up the value

chain and create

viral effect to

the economy

Hand
-
holding

approach from

the entry point

to inculcate business

acumen and propel

SME business

to the next level

FINANCING

INTERVENTION

Industry Focus

10

Islamic

Business Model

SMEs Ecosystem

Target Market

Need Based SMEs

Merit Based SMEs

Program
-
Managed
Lending (PML)

BUSINESS
MODEL TO SUPPORT GROWTH

Nurturing &
Intervention


Product Terms


Risk Parameters


Source of Funds


Pricing

MERIT

Based

Desired Outcomes:


Development Investment to
target
,
Contribution of
Ecosystem in Target Economic
Sectors, GDP contribution of
SME, Market Share

Government
Fund

SME 1

SME 2

SME 3

SME 4

NEED

Based

SME 5

SME 6

Desired
Outcomes:


Sustainability,

Development
Impact

Market Fund

Financing and
Intervention;
Partnership


Cash Flow and
Development
Strength

Risk and
Financial
Strength

11

12

Source of Funding

GENERAL

GOVERNMENT

MARKET


From

shareholders’

contribution


Internally

generated

funds


Sourced from Government Loans


Loans arranged by Government with
Domestic or Foreign Fund Providers


Sourced from the market


via
corporate deposits and/or
bond/
sukuk

issuance

Type of Financing

13


Bai

Bithaman

Ajil


Bai

Istisna



Ijarah


Ijarah

Thummal

Bai




Land


Building


Machineries


Equipments


Motor Vehicle

FIXED ASSET


Fixed


Revolving


Bai

Murabahah


Bai

Dayn


Bai

Inah


Kafalah


WORKING
CAPITAL

14

Entrepreneur Premise Program

25 Complexes/434 Lots

Financing
Facilities

Matching Grant
for Technical &
Training

Advisory
Services

Entrepreneurship
Training

Entrepreneurial Training

15

Islamic

SME Bank’s Existing
Clients

Existing/Would
-
be
Entrepreneurs

EPC
Participants

Scope

Intensive Training

SMEs Performance
Enhancement
Training

Basic Training

New Customer
Orientation Training

Type

TRAINING

Establishment

of
Centre for Entrepreneur Development &
Research (CEDAR)


To support SME Bank’s role in the area of human capital
development i.e. providing capacity building & capabilities
enhancement for SMEs

16

A Changing Scenario of Development Financing


DFIs have been forced to become less dependent as
Government face more budgetary constraints and
development aid declines


To use own financial strength to intermediate between
the providers and users of capital


To improve Balance Sheet to enhance attractiveness of
capital

Government’s Budgetary
Constraint


Developmental role or development assistance is often
non
-
recoverable but complements development
banking, thus, both functions become mutually
reinforcing


The functions are bundled together since the skills
required for assessing potential investments are
similar to those required to address capacity building
and other development needs

Complementary Function

17

On
-
Going Challenges


Balancing Act


DFIs

are

required

to

be

self

sustaining,

and

must

increasingly

raise

funds

independently,

with

or

without

government

guarantees
;


Need

to

pay

special

attention

to

the

entity

rating

and

adopt

prudent

risk

management

policies

and

practices
;


DFIs

would

end

up

prioritising

their

financing

activities

and

certain

high

risk

segments

of

the

market

would

left

unserved

;



Careful

balance

must

be

struck

between

investments

with

high

returns

and

less

secure

or

secured

but

attractive

in

pursuit

of

Government’s

development

agenda

;

and


Balance

set

of

skills

to

enhance

understanding

of

both

Banking

&

Business

capability

18

Development Financing


Conclusion


For

DFI

to

succeed

within

the

rapidly

changing

environment,

they

must

meet

the

challenges

for

an

effective

management
;


Requires

sound

governance

and

financial

management,

flexibility

and

the

ability

to

balance

cost
-
effective

intermediation

and

risk

management

with

outreach

through

smart

partnerships,

capacity

building

and

knowledge

management
;



DFIs

need

to

sufficiently

generate

income

through

diversification

of

income

stream

whi ch

coul d

be

used

to

cross

subsidize

its

developmental

role

For business. For growth. For life.

http://www.smebank.com.my


or contact

m.sabir@smebank.com.my