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Former Member
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About Roy Wakim

As Director of SAP Business One for Southeast Asia, Roy Wakim is responsible for the growth and expansion of this ERP solution within the region. He has 15 years of leadership experience, driving innovative sales strategies and execution across Asia Pacific. He has an MTech degree in Technology Management from the University of Western Sydney.

Policies and Government Grants for SMEs in Singapore, Malaysia, and Indonesia

Perhaps a common misconception among startups until today is that they have to do it alone. Imagine your fledgling company navigating the challenges of capital and costs in an increasingly globally competitive market. Daunting, isn’t it?
But small and medium-sized enterprise (SME) owners are not the only ones who believe in the growth potential of their business idea. Governments have also shown their fair share of support through grants and policies.
Within the ASEAN region, specifically, SMEs are highly valued and recognised for their role in the growing economy. A 2015 report by the US-ASEAN Business Alliance for Competitive Small and Medium Sized Enterprises states that SMEs account for more than 96 percent of businesses in the region. As such, policies towards SME development and modernisation play a major role towards realising the region’s full economic potential.
One report that aggregates SME development policies and actions implemented by ASEAN countries is the ASEAN SME Policy Index. It was developed to promote more competitive and innovative practices in the region and address concerns surrounding entrepreneurship, standards compliance, as well as marketing and management. The ASEAN Economic Community (AEC), on the other hand, was formed to transform the region into a single market and production base, integrating the Southeast Asian economies by 2025. One of its areas of focus is helping the SMEs trade in the region.
Such government policies provide a competitive playing field and optimistic outlook for SMEs.
In this blog post, we take a closer look at the government policies as well as grants within Singapore, which has arguably the most developed startup ecosystem in the region, and its neighbouring countries Malaysia and Indonesia.

Government policies and schemes for small businesses


Singapore, Malaysia, and Indonesia have set the pace for collaboration between government and the small businesses through their active policymaking agencies.
The Standards, Productivity and Innovation Board of Singapore (SPRING) under the Ministry of Trade and Industry lives by its mission of “enabling enterprise.” It aids SMEs by providing internationally recognised standards and quality assurance infrastructure while promoting compliance.
In Malaysia, the SME Corp. is the central coordinating agency formulating overall policies and strategies of SMEs and overseeing implementation. It also serves as the Secretariat to the National SME Development Council (NSDC), the highest policymaking body for SMEs in the country.
Indonesia’s Ministry of Cooperatives and SMEs (MoCSME) draws its mandate from the President himself to craft and coordinate policies to drive productivity, competitiveness, and independence towards a better business environment.
Beyond their bureaucratic functions, they tangibly serve the business sector through grants and funding opportunities.

Government grants: Helping the government help you
At the onset, you must know the key difference of a grant from other forms of monetary assistance: It’s not a loan; there is no expectation that you will pay the funds back. While being a grant beneficiary sounds like the perfect scenario, you should still be equally conscious of the pros and cons.
While a single stellar proposal can earn your company a considerable award in millions, that does not mean you can coast with cash flow. Grants are usually implemented under a reimbursement scheme, so be prepared to shell out some capital until the government releases funds. And as to be expected, bureaucratic processes take time.
Winning a grant elevates your small business’s reputation. But the prestige comes with paying your dues and building a profile that is up to par with what the application requires. Drafting a proposal demands research and planning, as well as comprehending and conforming to the grant-giving agency’s terms. These include rules and regulations that warrant specialised expertise and conditions that the grantee must strictly meet.
The payoff is ultimately more rewarding, which is why applying for grants is not only challenging but also competitive. But the good news is there are diverse prospects for Southeast Asian SMEs in need of funding.

Singapore government grants for small businesses
Singapore has a wide menu of government funding for capability upgrading initiatives, such as process improvement and product development. It also offers tech startup programmes as Singapore aspires to host its own version of Silicon Valley.
Singaporean SMEs are vital to the growth of GDP in the country—that’s why the government addresses their constraints like the lack of financial support and resources through these grants:



Malaysia government grants for small business


In Malaysia, the impact of SMEs on the overall economy had been modest compared to other countries despite their good performance. Thus, the government launched the SME Masterplan in 2012 to map the development of SMEs further. It paved the way for the following initiatives:


  • Through the Soft Loan Schemes for Service Sector, the Malaysian Industrial Development Berhad (MIDF) aids the expansion, upgrade, modernisation, and diversification for existing service providers into higher value-added activities.

  • MIDF’s Soft Loan for SMEs helps existing and startup companies in project, fixed assets, and working capital financing. It also helps them become more efficient and productive through the adoption of ICT in business management and operations.

  • The Young Entrepreneur Fund from SME Bank is available to young entrepreneurs, 18 to 30 years old, who are engaged in business activities catering to their generation.

  • The Business Start-Up Fund (BSF), sponsored by the Malaysian Technology Development Corporation (MTDC), reaches out to tech entrepreneurs and new startup companies.

  • TEKUN Financing provides funds to SME owners who eye expansion.

  • Agro Bank’s Perusahaan Kecil dan Sederhana provides financial backup to local agricultural entrepreneurs.

Indonesia government grants for small business
Indonesia’s economy relies on grassroot SMEs that comprise most of the sector. Because of SME’s importance to long-term sustainable economic growth, the government aims to catch up on productivity and narrow the gap between SME growth and large enterprises. Seeing clustering as a strategy to promote SMEs across the Indonesian archipelago, the government has also enlisted the help of non-profit organisations to roll out grants:



Innovating and preparing for the grant proposal
Now that you’re aware of the government schemes for small business within Singapore, Malaysia, and Indonesia, check out the ways you can increase your chances at winning one. Foremost is overcoming the tedious preparation of a proposal.
Do not fret. Focus. Sharpen your understanding of your business concept enough that you can convey and sell it. Your business plans should be clear and concise to you and those reviewing them.

Stand out.
As mentioned, there’s plenty of competition to draw the attention of grant-going bodies. You can make them notice you by giving accurate information, highlighting team expertise, and enumerating the economic benefits that your business can offer.
Lastly, when it comes to innovation, show, don’t tell. Most small businesses will claim to be above average right off the bat, but here’s one solid way to back it up: Automate your business processes through cloud-based enterprise resource planning (ERP) solutions. Grant-giving agencies specifically look for future-looking and innovative startups, and when they find out you’re open to using cloud-based ERP solutions, they’ll know you’re efficient, quick-thinking, and have great capacity for growth.
Besides, investing in a cloud-based ERP solution increases your productivity, safeguards your data, and helps you manage and streamline the processes that allow your small business to grow with ease. With or without the grant, it’s a win-win situation for all.
Modernise your processes and gain advantage over your competition through SAP Business One. It’s a worthy investment that will help make your business globally competitive.