Helping enterprises increase working capital, enterprises can apply for and obtain a low interest fund from Malaysia’s top commercial banks to assist their business turnover and expand business scale. What is SME? SMEs are small and medium-sized enterprises. Refers to a small business relative to a large one in terms of full-time employment or annual turnover. Generally small and medium-sized enterprises can be divided into: micro, small and medium, and by manufacturing and service industries. Size Micro Small Medium Manufacturing <RM300,000 or <5 people RM300,000-RM15,000,000 or 5 to <75 people RM15,000,000-RM50,000,000 or 75 to <200 people Service Industries & Other <RM300,000 or <5 people RM300,000-RM3,000,000 or 5 to <30 people RM3,000,000- RM20,000,000 or 30 to <75 people Small and medium-sized enterprises generally have the following characteristics: ① Small scale of operation, ② Limited capital, ③ Imperfect enterprise management. For Malaysia, the importance of SMEs Source: Department of Statistics, Malaysia and SME Corp. Malaysia. 1. Boost economic growth The activities of SMEs in China cover a wide range of fields, including services, manufacturing, agriculture and animal husbandry, which can reduce people’s dependence on imported products and develop export markets. Most SMEs support large companies and play the role of contractors. 2. Create jobs Small and medium-sized enterprises belong to labor-intensive enterprises, which provide employment opportunities, reduce unemployment rate, increase national income, narrow the gap between rich and poor, and make the country harmonious and prosperous. * In 2018, SMEs provided 66.20 percent of employment opportunities in China. Source: Department of Statistics, Malaysia 3. Improve people’s living standards SMEs provide a wide range of goods and services to meet the needs and desires of People’s Daily life and improve the quality of life. 4. Introduce or develop new goods, services and technologies Although small, it is an important source of introducing or developing new goods, services or technologies. In order to avoid competition with large enterprises, small and medium-sized enterprises have the courage to innovate. Create new blue ocean markets for new goods, services or technologies. The Challenges Faced by SMEs The challenges facing SMEs can be divided into four stages: start-up stage, growth stage, maturity stage and decline stage. 1. Initial Stage: At the beginning of business, the capital is limited, and the operation scale and market scope are small. You need to close your first deal as quickly as possible and make your first profit. In addition, it is necessary to build awareness, provide characteristic goods or services to attract customers, control operating costs and establish a business team 2. Growth stage: Product sales and company popularity gradually increased. Product sales continue to grow, we need to occupy a place in China and consider expanding overseas markets. But in order to secure more orders, small and medium-sized enterprises are often at the mercy of large buyers, rather than having the upper hand in bargaining. 3. Maturity: It is the comfort zone of the enterprise, and the entrepreneurial spirit of the enterprise will gradually fade away. Without new customers, sales and profits can hardly reach new heights. 4. Recession: Mainly due to technological innovation, increasing competition, changing consumer preferences, etc. As a result of overproduction, profits disappeared and sales failed to recover despite heavy advertising. Why apply for SME Loan? Most enterprises apply for SME loans simply because they need start-up capital or a reserve fund to fund their business. Example: Mr. A just graduated from college this year and inherited his father’s catering business. Mr. A needs some funds to help his father renovate his store, purchase new equipment, furniture, etc., and invest in researching new dishes. The initial calculation needs RM100K. Mr. A and his father went to the Companies Commission of Malaysia to renew the SSM and applied for SME loan in his father’s name at the bank. Maha owns a small farm in Cameron. The farm mainly grows strawberries and sells them to the market. A large supermarket invited him to supply strawberries. Due to lack of equipment and capacity, Maha failed to fulfill orders in time. He then applied for HSBC Working Capital Term Loan for SME to find ways to expand the farm and develop his business. The Best SME loan in Malaysia Commercial Bank: BSN Microplus, HSBC Working Capital Term Loan for SME. Financial Service company: Aspirasi Capital Plus Development Financial Institution: MIDF SME Emergency Fund, MIDF Soft Loan Scheme for Small & Medium Enterprises & SME Bank Business Accelerator Program