MY VARTHAGAM : New Guidelines for The Market Development Grant by MATRADE
KUALA LUMPUR, THURSDAY, 3 APRIL 2014: MATRADE today announced a revision of the guidelines for the Market Development Grant (MDG) which will take effect from 1 May 2014. The new guideline will allow more Small and Medium Enterprises (SMEs) to benefit from it and will focus on core expenses on activities by SMEs that have a direct impact on exports. The revision is also consistent with the Government’s austerity measures and the importance of prudent spending.
The MDG is a programme that assists SMEs to access to business opportunities in overseas markets. It is especially beneficial to new exporters in getting a foothold in the global marketplace through participation in international trade fairs, specialised marketing missions and other related activities.
Last year, the MDG received an overwhelming response from SMEs with an increase of 73% in total disbursements. This was the result of an increase in the number of companies participating in trade promotional activities from 3,493 in 2012 to 16,608.
A total of RM 46.7 million was disbursed through the MDG in 2013 to 2,182 SMEs of which RM 7.6 million was provided to Bumiputra companies and RM 16.7 million to women-owned enterprises. Through the participation of these SMEs in trade promotion activities in 2013, a total of RM 1.5 billion sales were generated and 5.9 million business leads received.
Effective January 2014, Small and Medium Enterprises (SMEs) have been reclassified as companies whose annual turnover is less than RM50 million with workers not exceeding 200 for the manufacturing sector, from the current definition of less than RM25 million in revenue and less than 150 workers. For the services sector, the value threshold has also been raised, with SMEs defined as firms with annual sales not exceeding RM20 million (less than RM5 million at present) or not more than 75 workers (less than 50 currently). The new definition is effective Jan 1, 2014.
The new definition for SMEs is expected to see an increase in the number of such firms from 97.3% to 98.5% of total business entities, adding more than 8,000 SMEs to the current pool. As a sought after grant, MATRADE foresees an increase in the number of new applicants for the MDG and the revision in guidelines will enable more SMEs to utilise the fund.
The Government takes cognisance that SMEs are a very important part of the business community and strives to provide assistance to ensure their viability. In 2013 alone,RM12 billion worth of assistance has been granted to 885,019 SMEs of which 100,118 SMEs have benefited in terms of market access.
Companies are able to view the new guidelines to the Market Development Grant on MATRADE’s website at www.matrade.gov.my from 1 April 2014.
MY VARTHAGAM
