By Saha Dhevan Meyanathan
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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)
Sample text
B. Support Institutions 43 Industrial Structures and the Development of Small and Medium Enterprise Linkages IV— Deepening of the Industrial Structure A. Interfirm Linkage Development Several factors have influenced the development of interfirm linkages within the Malaysian context: (a) acquiring of ownership of non−Bumiputera and foreign companies by Bumiputera trust agencies such as PERNAS, PNB (National Equity Corporation), MARA, and UDA; (b) franchising of well−known products (especially in the food subsector); (c) market arrangements involving buyer−supplier relationships between MNEs and local suppliers; and (d) fostering of interfirm linkages by the government since 1986.
Only 13 percent of SMEs in the UPM/IDRC survey were able to export their goods overseas. Many small firms lack knowledge of export procedures and overseas market opportunities and requirements for their products. This deters them from commencing export activities and forces them to remain heavily dependent on the domestic market. There are a few government agencies in Malaysia which provide free or subsidized consulting services in the marketing field. These include the Malaysian Council of Trust for the Development of Indigenous People (MARA), Malaysian Entrepreneurship Development Center (MEDEC), and the Development Finance Institutions (DFIs).
The beneficiaries of the loans were lower class hawkers and traders. Over 80 percent of the loans did not exceed M$5,000. MARA was also inflicted with informal patron−client relationships, fraud, and middlemen who used their knowledge of the system to skim off payments from loan recipients. MARA was confronted with the problem of creating Bumiputera entrepreneurs, many of whom, new to the "market culture," thought that loans were favors for which repayment was not seriously expected (Gale 1981).
