As a nation, Malaysia is wasting far too much energy with racial economics and racial polemics.
Check any statistics in the correct way and we will find incontrovertible proof that the largest employers are SMEs. Likewise the largest economic output is generated by the SMEs.
But, read any papers and watch any business media reports and, it's all about large corporations and GLCs.
SMEs are virtually invisible and unrecognised.
When Malaysian policy makers urge more private investments from within the country, I wonder who they are making the call to?
Large statutory funds like Khazanah Nasional and EPF are looking outside of Malaysia for yields and returns.
Large Malaysian corporations are expatriating funds overseas.
These large entities may be making purely rational decisions. There is no harm in that at all and, in fact, I applaud it.
But, who, then, form the bulk of the Malaysian private investment pool? It is obviously the SMEs.
I want to know if the policy makers are truly sincere in wanting to encourage more private investments? For, I know that many SMEs that wish to expand their productions lines and increase their capacities to respond to increasing demand are desperate.
The banks are the worst business sector in Malaysia in my books. They just want to lend to entities that are cash-rich and, who do not need further borrowing.
The banks do not want to lend to most SMEs.
Banks do not want to extend further loans to SMEs in large part because bank lending practices are now so de-personalised that the traditional bank manager who was part of the community are extinct. They have been replaced by faceless automatons in their respective head offices or, some central loan and security documentation units located in a faraway place that uses a meaningless check-list matrix for bank lending decision-making.
What are the SMEs to do?
My colleagues have helped clients apply for matching grants and soft loans from SMIDEC (now known as SME Corp)when the Malaysian Government announced the Stimulus Packages. We were told that the processing would take 6 months. When 6 months elapsed we were told that the allocation had been used up.
I don't even want to ask who benefited from and, received these matching grants and soft loans.
Check websites like this and you'll feel encouraged. Contact them and go through the process and, you'll feel despair.
It is in scenarios like this, beyond all the politics, that the real Malaysia exists.
After experiences like these, being spurned by commercial banks and, receiving no assistance from SME Corp aka SMIDEC, those of us who choose to survive learn to live by our wits and street-smarts.
But, I laugh out loud when I read the print media and watch the evening news because of the sheer disconnect that ordinary, hardworking, honest-to-goodness Malaysians must feel between their experiences with the banking sector and SMIDEC and, to read and listen to the cooing sounds made by politicians, civil servants and big industry leaders on the need to foster greater private investments in Malaysia.
It ain't happening.
Not for the want of SMEs trying to increase their private investments.
...but due purely to the structural nonsense that exists in our banking policies and badly implemented SME-assistance programmes.
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