FINANCING THE SERVICES SECTOR
-CEO FORUM VII
SOKHA ANGKOR RESORT HOTEL,
SIEM REAP, CAMBODIA
17 – 19 NOVEMBER 2010
1.
MALAYSIA’S OVERVIEW
2.
UNDERSTANDING SERVICE SECTOR IN MALAYSIA
3.
SME BANK MALAYSIA’S - AN OVERVIEW
4.
SME BANK’s FACILITIES & PACKAGING
5.
OUR EXPERIENCE IN SERVICES SECTOR
MALAYSIA OVERVIEW
Malaysia - Towards Achieving Vision 2020
GTP : National Key Result
Areas (NKRAs)
▪ Crime
N1
1MALAYSIA
People First, Performance Now
▪ Education
N2
▪ Corruption
N3
▪ Low Income Households
N4
▪ Urban Public Transport
N5
▪ Rural Basic Infrastructure
N6
NEM :Strategic reform
Government
Transformation
Programme
(GTP)
6 NKRAs
New
Economic
Model
(NEM) 8 SRIs
10th Malaysian Plan
P6 Ensuring equality of opportunities and
safeguarding the vulnerable
P2 Leveraging on our diversity internationally P7
Concentrated growth, inclusive development
P3 Transforming to high income, through
P8 Supporting effective and smart partnerships
specialization
P9 Valuing environmental endowments
P4 Unleashing productivity led-growth and
innovation
P10 Government as a competitive corporation
P5 Nurturing, attracting and retaining top
talent
P1 Internally driven, externally aware
initiatives (SRIs)
S1
▪ Re-energizing the private sector
▪ Developing a quality workforce
S2
▪ Creating a competitive domestic
S3
economy
▪ Strengthening the public sector
S4
▪ Transparent and market friendly
S5
affirmative action
▪ Building the knowledge base and
S6
infrastructure
▪ Enhancing the sources of growth
S7
▪ Ensuring sustainability of growth
S8
Together We Create Value Towards Sustainable Success
4
Malaysia – Economic Transformation Program (ETP)
6% p.a. real GDP growth target for 2011-2020
Raise the GNI from USD188B to USD523B by 2020
Lift per capita income from USD6,700 to USD15,000 by 2020
USD444B in funding and investments
8% public sector; 92% private sector (Private sector lead; Government facilitated)
131 Entry Point Projects with 60 Business Opportunities
Entry Point
Projects
Business
Opportunities
Investment
Requirement
[USD billion]
Private-Public
Split [%]
1, Oil Gas & Energy
12
7
68
98:1
2. Financial Services
10
6
66
96:4
3. Palm Oil
8
4
39
98:2
4. Wholesale & Retail
15
1
80
100:0
5. Tourism
12
4
64
98:2
6. Electronics & Electricals
11
4
24
88:12
7. Business Services
8
9
13
91:9
8. Education
13
4
6
94:6
9. Communication Content & Infras.
10
4
16
98:2
10. Healthcare
6
5
7
99:1
11. Agriculture
16
11
7
62:38
12. Greater KL
10
1
54
66:34
131
60
444
92:8
National Key Economic Area
TOTAL
Together We Create Value Towards Sustainable Success
Malaysia - National Key Economic Activities - NKEA
SME Bank is in line with the
government’s focus on the
service sector
Service
Sector
Together We Create Value Towards Sustainable Success
Malaysia - Customer Groups
Definition of SMEs by National SME Development Council 2004
Manufacturing
Including agro-based manufacturing and manufacturing
related services
Annual Turnover
Full Time Employees
MEDIUM
RM10 mil – RM25 mil
51 – 150 full time employees
SMALL
RM250,000 < RM10 mil
5 – 50 full time employees
MICRO
< RM250,000
< 5 full time employees
Services
Including Information & Communication Technology
Annual Turnover
Full Time Employees
MEDIUM
RM1 mil – RM5 mil
20 – 50 full time employees
SMALL
RM200,000 < RM1 mil
5 – 19 full time employees
MICRO
< RM200,000
< 5 full time employees
Together We Create Value Towards Sustainable Success
7
UNDERSTANDING SERVICE SECTOR IN
MALAYSIA
Malaysia – Importance Of Service Sector

Liberalised the 27 services subsector to attract more foreign
investments – 2009

These sub-sectors - health and
social services, tourism
services, transport services,
business services and computer
and related services.

National Committee for Approval
of Investments in the Services
Sector established under MIDA.

Act as a focal point to receive
and process applications of
investments in the services
sector
Logistic
Business &
Professional
ICT
Construction
Service
Sector
Distributive
Trade
Education
& Training
Tourism
Health
Together We Create Value Towards Sustainable Success
Malaysia – Service Sector Contribution To GDP
Continue To Expand
SERVICE SECTOR CONTRIBUTION TO GDP
80
8
7
70
6
S
E
R
V
I
C
E
S
60
5
50
4
40
3 G
D
2 P
30
1
20
0
-1
10
0
-2
2006
2007
2008
2009
2010(e)
2015(f)
2020(f)
Services (%)
52
53.7
55
57.9
58.9
62.4
67.3
GDP (%)
5.8
6.5
4.7
-1.7
6
6.1
6.9
YEAR
Malaysia’s service sector continued to expand over the years
Together We Create Value Towards Sustainable Success
-3
Malaysia – Service Sector Contribution To GDP
Continue To Expand
Malaysia – Performance Services Sub-Sector
18%
60%
16%
58%
S
e
r
v
i
c
e
s
S
u
b
-
14%
12%
56% S
e
r
v
54%
i
c
e
52% s
S
e 10%
c
t
o 8%
r
6%
4%
50%
2%
0%
48%
2006
Construction
2007
Electricity, Gas & Water
2008
Wholesale & Retail Trade,
Accomodation & Restaurant
2009
Transport, Storage &
Communications
2010(e)
Finance, Insurance, Real Estate
& Business Services
Malaysia’s service sector continued to expand over the years
Together We Create Value Towards Sustainable Success
Services
Malaysia - Common Facilities Extended To Service Sector
Term
Loan
Revolving
Credit
Overdraft
FinancingService
Sector
Trade
Finance
Leasing
Hire
Purchase
Contract /
Project
Financing
Together We Create Value Towards Sustainable Success
SME BANK OF MALAYSIA
- AN OVERVIEW
Ownership & Mandate
Shareholder
Ministry OF
Finance Inc.
Supervising Ministry
Regulator under DFIA 2002
Central Bank
Malaysia
Ministry Of
International
Trade & Industry
SME financing
• Manufacturing sector
• Services sector
• Construction sector
SME BANK
Together We Create Value Towards Sustainable Success
SME BANK’s FACILITIES & PACKAGING
Financing Facilities & Packaging
FINANCING FACILITIES
Conventional
Islamic
Working Capital Financing
Fixed Asset Financing
Credit Guarantee Scheme (CGS & CGS-I)
I-Cash
SME PACKAGING
SME Start-up
SME Franchise
SME Professional
SME Global
SME Procurement
Developing SMEs from start-up to expansion and export stages
Together We Create Value Towards Sustainable Success
OUR EXPERIENCE IN SERVICES SECTOR
Contribution To SME Development in Malaysia
Approval
2005
2006
2007
2008
2009
Aug
2010
Total Approval
No
720
1,227
1,622
1,192
1,095
416
Value (USD Mil)
535
689
984
710
657
160
Total Approval - Service Sector
No
467
979
1,379
1,025
913
329
Value (USD Mil)
378
549
865
602
534
130
% Contribution
71
80
88
85
81
81
In line with the government focus on the service sector
Together We Create Value Towards Sustainable Success
Contribution To SME Development in Malaysia
Total Portfolio
Portfolio As At August 2010
Construction
6%
Manufacturing
25%
Service
67%
Mining & Quarrying
1%
Agro based
1%
In line with the government focus on the service sector
Together We Create Value Towards Sustainable Success
Contribution To SME Development in Malaysia
Portfolio – Services Sub-Sector
Services Sub-Sector 2006 - Aug 2010
40%
70%
68%
35%
66%
S
e
r
v
i
c
e
s
30%
64% S
S
u
b
-
S
25%
e
c
20%
t
o
r15%
e
r
v
60%
i
58% c
e
56% s
62%
10%
54%
5%
52%
0%
50%
2006
2007
Construction
Electricity, Gas And Water
Transport, Storage & Communication
Services
2008
2009
Aug-10
Year
Education, Health & Others
Finance, Insurance, Real Estate & Business Activities
Wholesale & Retail Trade, And Restaurants & Hotels
Our exposure in services sector increase over years,
in line with the government plan to boost the sectors
Together We Create Value Towards Sustainable Success
Contribution To SME Development in Malaysia
Common Facilities Offered
OTHER TERM LOANS - Fixed
Assets & Working Capital
84%
REVOLVING CREDIT
8%
FACTORING RECEIVABLES
0%
HIRE PURCHASE
5%
OTHER LOANS - Fixed Assets
3%
Fixed Assets & Working Capital the most common
facilities offered in service sector
Together We Create Value Towards Sustainable Success
Contribution To SME Development in Malaysia
Together We Create Value Towards Sustainable Success
THANK YOU