By SHAHEERA AZNAM SHAH / Pic By MUHD AMIN NAHARUL

Local small and medium enterprises (SMEs) need to focus on their way of doing business to ensure efficiency and productivity, said SME Corp Malaysia.

CEO Datuk Dr Hafsah Hashim (picture) said the government agency is collaborating with other agencies to focus on business sustainability for SMEs.

She said a detailed study on SMEs business performance is currently being conducted to facilitate the growth of the industry.

“SME Corp is working together with the Malaysian Productivity Corp (MPC) to ensure that the industry not only be enhanced in their productivity, but through the implementation of it.

“For example, we encourage SMEs to look at approaches like a lean production system that focuses on cutting out waste while ensuring quality,” Hafsah told reporters at the Enterprise 50 Award 2017 in Kuala Lumpur recently.

“To measure the effectiveness of the businesses, we are in the middle of a study that looks at the factors affecting business performance, particularly for the companies with small to medium capital.

“The unstable fuel price is one of the main concerns that have been highlighted. With more than 2,000 SMEs involved in this study, we hope it can help push the industry forward,” she said.

The study will be presented to Prime Minister Datuk Seri Mohd Najib Razak at the end of this month.

Najib had said that SMEs need to increase productivity by at least 8% to contribute to the national economy, to achieve the target of 41% contribution by 2020. The industry now contributes 36.9% to the economy.

To this, Hafsah said SME Corp has collaborated with Malaysian Industrial Development Finance Bhd and Small Medium Enterprise Development Bank Malaysia Bhd to provide loans for SMEs to get more involved in automation, thus reducing the cost in doing business.

On the positive numbers announced for Malaysia’s third quarter this year (3Q17), Hafsah is optimistic SMEs will continue to perform — backed by its solid track record since 2004.

“Through our valuation on the SMEs’ trend analysis from 2004-2016, the industry’s growth maintained to exceed between 1% and 2% more from the economic growth.

“The SMEs’ contribution will likely increase and sustain, backed by government assistance as noted in the budget,” she said.

Last Friday, Bank Negara Malaysia said Malaysia’s gross domestic product grew at 6.2% in 3Q17, driven by domestic demand and positive growth from all major industries.

Meanwhile, SME Corp’s Enterprise 50 Award 2017 highlighted SMEs with financial stability, as well as operation and management skills.

Hafsah said the small sample of the industry represented by the event’s participation indicates the SMEs’ healthy performance.

“In this challenging economic scene, the recipients have proven their competitiveness and resilience with nearly 70% of this year’s participants having penetrated the export market.

“We remain positive for the number to increase over time, in line with the budget allocation for the SME sector,” she said.