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Additional info for Industrial Structures and the Development of Small and Medium Enterprise Linkages: Examples from East Asia (Edi Seminar Series)

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Eighty percent of the firms surveyed listed their own funds as their major source of financing. The inability of SMEs to provide adequate collateral for loans from the banking system has also restricted access to commercial bank credit in most cases, resulting in a shortage of working capital. Chee (1986) estimated in his study that only about 6 percent of these loans came from the banking sector. Rather than the cost of credit, access to credit, particularly for non−Bumiputera enterprises, is a major constraint facing Malaysian SMEs.

These services are provided by the industrial extension unit of SIRIM (Standards and Industrial Research Institute of Malaysia), the small−scale industry section of the Forest Research Institute (in the case of the wood−based industry), and the Food Technology Division (FTD) of MARDI (Malaysian Agricultural Research and Development Institute). Among the three, the FTD of MARDI has an adoption scheme that involves providing selected firms with a three−year program of technology training, together with a comprehensive review and upgrading of the firm's production process, quality management, packaging, and product line.

It became a reality in 1989 as the first industry−led training institution in Malaysia. Since its establishment as a nonprofit organization, it has emerged as one of the leading training institutes in the country, making it a model for other states to follow. The Center has been financed by both the private sector and the state government. The state government has provided the premises and a grant for the first eight years of its operations. Its corporate members have supported the Center with seed money and donations in the form of money, time, and equipment.

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