Governance of small and medium enterprise :an assessment of their perfomances

Abstract

Small and Medium Enterprises (SME) SME had played an important in the economic development of Malaysia. In 2005, the Census of Establishments and Enterprises showed that 99.2% or 518,996 of business establishments are small and medium enterprises, of which 411 ,849 are micro enterprises. Most of these SMEs are in the services sector, particularly in retail, restaurant and wholesale businesses. Total employment in the SMEs accounted for more than 3 million workers or 65.1 % of total employment in manufacturing and service sector, and generated RM1 54 billion value-added in 2003. Considering the importance of SME, SME was given a special mention in almost every Malaysia Long-Term Economic Development Plans. Malaysian good governance of SME which aim to enhance their economic contribution can bee seen by providing institutional supports and assistances. This is reflected by the establishment of various agencies such as SMEDEC which a responsible in assisting SMEs by providing incentives and grants, and the establishment of SME Bank that provide financial supports to SMEs. This article aims to access government policies and assistances regarding the development SME, identify the current nature of problems faced by SME entrepreneurs and suggesting the policy implications for future development of SME.