Rapporteur Report
Plenary Session 3
1.0 Title of Discussion
Financing and Source of Fund for Business
Incubation
2.0 Presenter
Dr. Muhammad Solaiman
(
3.0 Chairperson/Moderator
Dr. Morgen Chateuka
4.0 Rapporteurs
4.1 Shahrin Hj Mohd Tamit
4.2 Siti Rozana DP Hj Mohd
Yunos
5.1 Abstract/Overview
There is no doubt that funding is
one of the crucial problems faced by SMEs. The general view given by formal
sectors and financial institutions is that SMEs are risky in nature thus, SMEs would require an extensive form of security to be
enable them to access the funding. The paper highlighted the experience of
5.2 Main points and Issues discussed
5.2.1 Sources of funding: made up of internal (a
built-in mechanism that is generated within the company itself (e.g. profits))
and external sources (formal sector and financial institutions).
5.2.2 Financing constraints such as
project preparation, collateral requirements and bureaucracy and corruption.
5.2.3 Mechanisms and support
institutions to minimize the funding constraints.
5.2.4 Best practices in financing SMEs
have also been highlighted.
6.0 Suggestions and Conclusion
7.0 Question and Answer Session
7.1 Q: What are the strategies
developed in recovering the loans given to the SMMEs?
(
A: The trend the last few years
has been very promising. The recovery rate in
7.2 Q: Elaborate further the role of
the government in providing collateral for the SMMEs.
(
A: Certain institutions do provide
financing in the form of free collateral but it is normally for amounts that
are below $100,000. There are several other alternatives to collateral, such as
the shop house or the enterprise itself can be regarded as collateral.
7.3 Q: How small are the small
enterprises? (
A: NGOs work at grass roots level
and look after very poor people but not entirely as there are those that do not
participate in SMEs due to specific reasons. There should be a kind of safety
net programme provided such as lowering interest
rates and that there is some scope in which countries can learn about providing
financing to SMEs.
7.4 Q: How has corruption been dealt
with? (Expert)
A: There is a high level of
corruption in
7.5 All this time much has been said
what can be done with the financing problems within the