KUALA LUMPUR: Malaysian small and medium enterprises (SMEs) remain positive on the industry’s outlook next year despite external and internal challenges, aided by the Government’s continuous support, says the SME Association of Malaysia.
Its national president Teh Kee Sin said the Government, under its Budget 2015 announcement, would allocate RM14.3bil for 18 programmes proposed for SME development, encompassing the services sector, bumiputra entrepreneurs, youths, graduates, micro-enterprises, petty traders, women, smallholders, cooperatives and trade associations.
“The SMEs appreciate the incentives provided by the Government and I hope that they will fully utilise the allocation,” he told Bernama.
Teh said although the economic situation was likely to be tough next year, SMEs could overcome the challenges by making full use of the Government’s assistance schemes.
As a net exporter of crude oil, Malaysia is currently hit by the slump in global crude oil prices to around US$60 per barrel following the Organisation of the Petroleum Exporting Countries decision not to cut its crude oil production, despite lower demand for the commodity.
It is also reported that prices may fall further for another two quarters until mid-2015, putting oil and gas heavyweights in the red on the local exchange, besides weakening the ringgit to RM3.50 per US dollar.
These were among the factors that will dampen SMEs’ growth next year, he said, adding that an exchange rate of RM3.10 to the greenback would not unduly affect SMEs’ quotations to customers.
Customers did not like it if we revised our quotations, he said.
There were also some internal factors that could lead to lower spending power, slowing down SMEs’ growth, he said.
Teh said the challenges in 2014, arising from the higher cost of doing business due to the subsidy rationalisation and higher raw material prices, would likely continue next year, creating an additional burden to the SMEs and cutting their profits 20%. — Bernama