2.2. Challenges faced by SMEs
A number of studies have been performed on challenges faced by SMEs in developing countries as well as
Malaysia. Some of them worth mentioning in Malaysia are as follows:
Asia Pacific Economic Corporation (APEC) in its survey (1994), highlighted key challenges relating to obtaining
loans, a lack of proper coordination amongst the country’s SME development agencies, an inability of SMEs to
participate in the mainstream of industrial development, underutilization of available technical assistance and other
incentives and a lack of skilled and talented workers.
Small and Medium Industries Development Plan (SMIDP) in its 2001-2005 report (SMIDEC, 2002) and SME
Masterplan (2012) identified many challenges faced both at the domestic and international levels. These challenges
can be summarized as follows:
x Innovation and technology adoption (low commercialisation , poor technology uptake
x Human capital development ( lack of job readiness of employees and effectiveness of training)
x Access to ¿nancing ( limited non-banking avenues, poor credit worthiness and lack of know how /resources);
x Market access(information barriers for exports, low marketing and branding);
x Legal and regulatory environment (Licensing and permits issues, compliance to regulations); and
x Infrastructure (trade clearance and facilitation system and low/infrequent trade volumes).