Putrajaya to push for minimum 50% SMEs’ involvement in govt procurement

Presently, SMEs contribute 38% to the country’s GDP and it is targeted to achieve 50% by 2030


THE government plans to reach a minimum 50% involvement of small and medium enterprises’ (SMEs) participation in procurement schemes related to its departments and state-owned agencies.

The federal policy will see the involvement of more SMEs in the lucrative government contracts which have been largely dominated by the larger players in the past.

Deputy Entrepreneur Development Minister Datuk Dr Mohd Hatta Md Ramli said the policy will be a “friendly” approach to assist the SMEs.

“We need to have a policy that allows our SMEs, not just as vendors but suppliers and contractors too, to be involved in at least 50% of the government’s procurement.

“It is a ‘friendly’ policy to raise the SMEs’ contribution to the country’s GDP,” he said at the launch of the Vendor Innovation Partnership Programme in Kuala Lumpur (KL) yesterday.

Mohd Hatta said presently, SMEs’ involvement in the government’s procurement stands at about 35%.

“Currently, we are working with the Ministry of Finance and various stakeholders including the Ministry of Defence, among others, to put in place the policy.

“It is also part and parcel of the ministry’s policy alignment process to ensure our SMEs will account for 50% of the GDP in 2030,” he said.

The government has been asked to raise the portion of small businesses in the government departments and government-linked agencies procurements.

Presently, SMEs contribute 38% to the country’s GDP and it is targeted to achieve 50% by 2030. There are more than 900,000 SMEs in the country.

Last year, a total of 1,094 vendors achieved a turnover of RM5.3 billion under the Ministry of Entrepreneur Development’s (MED) Vendor Development Programme (VDP)

“MED will work with the government to ensure that VDP is considered as one of the priority areas in the 12th Malaysia Plan (2021-2025).

“We want to strengthen our VDP to enable this sector of the economy to contribute more significantly to the expansion of the GDP,” Mohd Hatta said.

At the event, SME Bank Malaysia, a financial agency under MED, signed a partnership agreement with Celcom Axiata Bhd to establish successful SME players in the telecommunications (telco) sector.

SME Bank CEO and group president Aria Putera Ismail said under the partnership, the bank is providing RM100 million financing facility for prospective SMEs who are in the telco industry.

“The collaboration has opened up opportunities for small entrepreneurs who are existing Celcom’s contractors, vendors and suppliers to gain access to the financial facility by SME Bank,” he said.

Aria said the facility offered is in the form of contract financing, working capital and purchase of assets.