Business

Friday March 27, 2009

Ramon: SMEs in need of comprehensive plan


Nation lacks strategy to help sector weather crisis

KUALA LUMPUR: A comprehensive plan designed specifically for small and medium-scale enterprises (SMEs) will help the sector weather the current economic crisis, according to prominent economist Tan Sri Ramon Navaratnam.

“The SMEs are the backbone of the nation and yet we don’t really have a definite strategic plan for them,’’ Navaratnam told reporters after his opening remarks at a seminar for SMEs organised by the Asian Strategic & Leadership Institute (ASLI) yesterday.

He said SMEs were the worst affected during the downturn as most of them had no capacity and the capabilities to deal with a crisis of this magnitude.

“There are also no proper surveys conducted on them. We don’t really know what sort of difficulties they are facing right now, or how many have actually closed shop,’’ Navaratnam said.

Tan Sri Ramon Navaratnam

Figures from ASLI’s press release showed SMEs were the source of employment for more than half of the country’s working population.

Navaratnam gathered, based on his discussion with participants at the event, that limited access to funds remained one of the biggest problems faced by these entrepreneurs.

This was despite the Government, through various agencies, having put in place a number of microcredit schemes and loan guarantee plans designed to make it easier for businesses to meet their financing needs.

“Banks shouldn’t just be a fair weather friend to small businesses,’’ the chairman of ASLI’s Centre for Public Policy Studies said.

Bank Negara, in its annual report 2008, said financial institutions must balance their need to manage risk and provide support for their customers, particularly in easing temporary cashflow pressures.

“More can be done to guide and facilitate SMEs in dealing with the crisis,’’ said Navaratnam, who spent five years as chief executive officer at Bank Buruh in the early 1990s and more than 30 years in the civil service.

He recently retired as president of Transparency International Malaysia after three years and was replaced by Datuk Paul Low.


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