Contribution of SMEs to Economic Development of ASEAN Countries: The Three Focus Areas

Objective – Small and medium enterprises (SMEs) undeniably play an important role in the overall economic growth of respective ASEAN countries. Therefore, ASEAN governments and government agencies have implemented various policies and programmes to facilitate their SMEs. The SMEs contribution to Economic Development is important and the paper will compare the ASEAN countries and Malaysia to offer to push Malaysia ahead driving its SMEs contributions materially towards Malaysian economy. Methodology/Technique – This paper will review the progress, outcomes and obstacles for some of these policies and programmes according to three focus areas, namely (A) Innovation and Technology Transfer, (B) Access to Finance, (C) Infrastructure Development and Facilitation. The information is of importance as each of the factors is able to strengthen the SMEs and in turn increase the contributions to each countries growth. Findings – The study finding shows that even though Malaysia has until 2017 to put into place the necessary changes, there have been arguments that this regulation may have a negative impact on SME financing. No one-size-fits-all financing solution. Novelty – A comprehensive menu of policy options on SME finance is needed, with innovation to address the problems created from two perspectives which are the demand and supply side of financing. Type of Paper: Review