KUALA LUMPUR (Oct 2): The SME Association of Malaysia (SMEAM) has called on the government to place greater emphasis on the outcomes of its assistance to small and medium enterprises (SMEs) in Budget 2027, rather than on the amount allocated for various programmes.
SMEAM national president Dr Chin Chee Seong said the effectiveness of SME support should be assessed based on whether it leads to measurable improvements in productivity, investment, business growth and competitiveness.
At a joint press conference with the Malaysia Retail Chain Association (MRCA) on Friday, Chin said grants should be tied to results, such as demonstrable gains in automation or business performance.
Instead of providing assistance based solely on eligibility, he suggested that businesses demonstrate improvements in areas such as automation, competitiveness or business performance before receiving support.
The SMEAM’s Budget 2027 proposal sets out six priorities, namely reducing cumulative business costs, providing financing according to companies’ growth stages, raising productivity, strengthening linkages between foreign direct investment (FDI) and local SMEs, encouraging domestic direct investment, and creating an integrated SME development gateway.
The association said the eventual measure of the assistance should include whether SMEs become more productive, adopt new technology, create higher-skilled jobs, enter multinational companies or government-linked companies supply chains, access new export markets, commercialise Malaysian intellectual property, generate productive domestic investment, and progress from micro enterprises into small, medium and mid-tier companies.
“We want the government to start looking into not only competitiveness, but also the future of Malaysian champions,” Chin said.
The SMEAM also called for Malaysia’s FDI inflows to generate greater opportunities for local companies. The association said the focus should extend beyond attracting foreign investors to measuring the number of Malaysian SMEs entering their supply chains, the value of domestic procurement and the extent of technology and knowledge transfer.
“Make FDI work harder for SMEs. Because many of us complain. Data centres coming in, nothing for us. Big investments coming in, nothing for SMEs. Nothing for the supply chain, nothing for the ecosystem,” said Chin.
At the same time, the SMEAM said stronger domestic direct investment is needed to encourage Malaysian-owned businesses to reinvest, automate, innovate, expand and internationalise.
"It must help Malaysian companies to invest. We have a lot of money here. In fact, we have many members that are expanding themselves, but not here [in Malaysia]. They build their factory in Vietnam, they build their factory in other countries. Because they do not have incentives to do it here,” said Chin.
He said stronger domestic businesses would be needed alongside continued efforts to attract foreign companies, with government support aimed at helping Malaysian companies expand into regional and global markets.
"It must help Malaysia companies to invest. We have a lot of money here. In fact, we have many members that are expanding themselves, but not here [in Malaysia]. They build their factory in Vietnam, they build their factory in other countries. Because they do not have incentive to do it here,” said Chin.
The SMEAM also stressed the need for major policy changes to be better sequenced, with consultation and transition periods where necessary, to prevent multiple cost increases from placing pressure on SMEs’ cash flow and capacity to invest.