STRATEGIC ENTREPRENEURSHIP

TOPIC9DR ANIS AMIRA AB RAHMAN

EZANI BIN YUSOFF

FACULTY OF ENTREPRENEURSHIP AND BUSINESSUNIVERSITI MALAYSIA KELANTAN

anisamira@umk.edu.my

Dr Anis Amira Ab Rahman 14

THE ROLES AND FUNCTIONS OF GOVERNMENT AGENCIES IN

STRATEGIC ENTREPRENEURSHIP

Dr Anis Amira Ab Rahman 14

INTRODUCTION OF FINANCIAL

The financial services sector is the bedrock of any

economy. It is a key enabler of the overall economy,

providing capital (in various forms) to enable the growth

of all other industries (as well as consumers) in the

economy.

All large successful economies require strong banks,

vibrant capital market and well-functioning financial

infrastructure.

Background

Bank-credit refers to loans, advances and discounts

(LAD) of specified sums, terms and other condition made

available to individuals and entrepreneurs to start, grow

or sustain any productive activity.

Funds are necessary for the smooth running of any

business, and often such funds must come in form of

bank-credit or any other financial institutions.

In financial economics, a financial institution acts as an

agent that provides financial services from its clients.

Financial institutions generally fall under financial

regulation from a government authority

Types of Financial Institutions

Common types of financial institutions include banks,

Insurance Co., leasing Co, Investment Co, & Mutual Funds

In financial economics, a financial institution acts as an

agent that provides financial services from its clients.

Financial institutions generally fall under financial

regulation from a government authority

Types of Financial Institutions

Common types of financial institutions include banks,

Insurance Co., leasing Co, Investment Co, & Mutual Funds

Banks

▪ A bank is a commercial or state institution that provides

financial services, including issuing money in various forms,

receiving deposits of money, lending money and processing

transactions and the creating of credit.

Commercial Banks

▪ A Commercial bank accepts deposits from customers and

in turn makes loans, even in excess of the deposits; a

process known as fractional-reserve banking. Some banks

(called Banks of issue) issue banknotes as legal tender.

Investment Banks

▪ Investments banks helps companies and governments

and their agencies to raise money by issuing and selling

securities in primary market. They assist public and

private corporations in raising funds in the capital markets

(both equity and debt), as well as in providing strategic

advisory services for mergers, acquisitions and other

types of financial transactions

Islamic Banks

▪ Islamic banking refers to a system of banking or

banking activity that is consistent with Islamic law (Sharia)

principles and guided by Islamic economics. In particular,

Islamic law prohibits usury, the collection and payment

of interest, also commonly called riba in Islamic disclourse.

Financial Institution Functions

▪ Financial institutions provide a service as intermediaries

of the capital and debt markets. They are responsible for

transferring funds from investors to companies, in need of

those funds. The presence of financial institutions facilitate

the flow of cash through the economy.

▪ To do so, savings account are pooled to mitigate the risk

brought by individual account holders in order to provide

funds for loans. Such is the primary means for depository

institutions to develop revenue.

BUSINESS FUNDING IN MALAYSIA

The financial landscape for SMEs in Malaysia is

comprehensive, supporting the various business needs

of SMEs along the different stages of the business cycle.

Credit to SMIs

Pro-active in loan evaluation processes by the financial

institutions helps increasing the flexibility in extending loans to

SMIs. Also, the Government established the Rehabilitation

Fund for Small and Medium Industries (RSMIs) in 1998, with

an initial allocation of RM750 million to assist SMIs which were

viable but face difficulties in obtaining credit facilities.

(The Development of Malaysia Economy by Poon Wai Ching, Prentice Hall, 2005)

Selected Government Agencies Supporting SMEs

The support of the local government is vital in ensuring the

successful development of SMEs in any country. Currently, at

least 18 local ministries and 60 government agencies are

actively involved in the development of Malaysian SMEs.

The SMEs in Malaysia are fortunate to have the full support of

the local government in all aspects of their operations. The

government ministries and their agencies provide assistance in

disseminating information, technical expertise, training,

financing, etc.

Financial Assistance by Government Ministries & Agencies

To support the development of SMEs, the Government provides a

comprehensive set of programmes through the various of

Government Ministries and Agencies, which are broadly

categorized into "Financial Assistance" and "Business Support

Services". Below are some of the ministries and government

agencies that support SMEs:

Ministry of International Trade and Industry (MITI)

SME Corp. Malaysia

Bank Perusahaan Kecil & Sederhana Berhad (SME Bank)

Malaysia External Trade Development Corporation (MATRADE)

Malaysian Industrial Development Authority (MIDA)

Malaysian Industrial Development Finance Berhad (MIDF)

Ministry of Finance (MOF)

▪ Bank Pembangunan Malaysia Berhad (BPMB)

▪ Amanah Ikhtiar Malaysia (AIM)

▪ Export-Import Bank Malaysia Berhad (EXIM Bank)

▪ Malaysia Debt Ventures Berhad (MDV)

▪ Malaysian Venture Capital Management Berhad (MAVCAP)

▪ Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN)

Ministry of Agriculture and Agro-based Industry

(MOA)

▪ Agrobank Malaysia

…….continue

Ministry of Science, Technology and Innovation (MOSTI)

▪ Ministry of Science, Technology and Innovation (MOSTI)

▪ Malaysian Biotechnology Corporation Bhd (MBC)

▪ Malaysian Technology Development Corporation Sdn Bhd

(MTDC)

▪ MIMOS Berhad (MIMOS)

▪ Multimedia Development Corporation (MDeC)

Ministry of Rural and Regional Development (MRRD)

▪ Majlis Amanah Rakyat (MARA)

…….continue

…….continue

Ministry of Plantation Industries and Commodities

(MPIC)

▪ Malaysian Timber Industry Board (MTIB)

Ministry of Domestic Trade Co-Operatives and

Consumerism (KPDNKK)

Agency

● Bank Negara Malaysia (BNM)

● Perbadanan Usahawan Nasional Berhad (PUNB)

● Credit Guarantee Corporation Malaysia Berhad (CGC)

● Commerce Asset Ventures Sdn. Bhd.

● Mayban Ventures Sdn. Bhd.

The roles and functions of government agencies

Information Sources

Assistance

Training, consulting, and mentoring provided by

experienced executives and entrepreneurs

General information

Start-up assistance on Web-based resources

Industry and market information

Available on industry and market databases

Competitive company and product information

Provided by external sources

Industry and market information

Available on industry and market databases

Competitive company and product information

Provided by external sources

Government sources

…….continue

…….continue

Search engines

Enable searching the needed industry, market, and

competitive information

Trade associations

Provide country-specific industry data

Trade publications

Provide information and insights on trends and

companies, perspective on the particular market and

market conditions

Business Support System

Information and assistance is readily available for

entrepreneurs, particularly those starting a new venture.

The role and functions of government are important to

support entrepreneurs in identifying an appropriate

opportunity. The assistance takes the form of technical,

marketing, infrastructure, information, Research &

Development, Financial and advisory.

SIRIM. MARA,

Techno. Park,

MARDI, RRI, FRIM

etc.

Technical

Assistance

Offered to

entrepreneurs or

potential

entrepreneurs to

expose them to

production methods

and systematic

management.

MITI, MATRADE,

SME Corp., FAMA,

GUTHRIE and etc.

Marketing

Assistance

The aim of marketing

assistance is to help

entrepreneurs

distribute and market

their products and

services local and

internationally

MARA, SEDC,

SIRIM, UDA,

Techo. Park,

KKLW, BPIMB,

MIDA and etc.

Infrastructure

Assistance

Provide facilities to

assist entrepreneurs

in getting business

premise

MITI, MATRADE,

MARDI, SIRIM,

SME Corp., MIDA,

FRIM, Local higher

Learning

Institutions and etc.

Information

Assistance

This information

assistance is made

available to

entrepreneurs in the

form of business

opportunities, statistics,

new research findings,

new technology and

etc.

MARDI, SIRIM,

Local Higher

Learning

Institutions and

etc.

Research &

Development

Developed

entrepreneurs in

conducting R&D in

term of new method of

production process,

cost reduction, quality

and safety and etc.

Commercial banks

, Finance

companies ,

Government

agencies and

Venture capitalists

Financial

Assistance

The purpose of financial

assistance is to provide

financing facilities to

entrepreneurs in

constructing and

implementing their

business ideas.

MEDEC, MARA,

KPUn, SEDC, SME

Corp. and etc.

Advisory

services

Provide business

advisory and

disseminate

information on

Government funds

and incentives on

SMEs to

entrepreneurs.

Applicants will

receive business and

technical advisory

services, aimed at

enhancing their

business potential.

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management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.

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Timmons J, Spinelli S, (2007) New Venture Creation: Entrepreneurship for the 21st Century, 7th. Edition,

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Fundamental of Entrepreneurship, UiTM Entrepreneurship Study Group

Dr Anis Amira Ab Rahman 14