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Financial Discipline Underpins Successful Business: Minister
By Huraizah Ahmad & Suria Rina PHA

Bandar Seri Begawan - Entrepreneurs must assume a high level of personal integrity and adopt a strong capacity towards business management, especially financial discipline since a true understanding and strict demonstration of financial discipline would always underpin a successful business.

This was the advice given by the Minister of Finance II, Pehin Orang Kaya Laila Setia Dato Seri Setia Haji Awang Abdul Rahman bin Haji Ibrahim, at the official launch of the First International Islamic Conference on Inclusive Islamic Financial Sector Development at the Indera Kayangan Ballroom of the Empire Hotel & Country Club yesterday.

Earlier, the minister revealed that through various initiatives to encourage local SMEs growth, the government in 2006 had granted a total of B$18.38 million worth of financial support to 66 entrepreneurs via the Industrial Facilities Scheme in sectors such as agriculture, fisheries, manufacturing and tourism.

During that period, a total sum of RS 6.78 million had also been granted to 356 entrepreneurs under the Micro-Credit Financing Scheme for businesses including construction, rigid supplies, fisheries and retail.

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The kick of success in performance and growth of local SMEs cannot be solely attributed to a lack in government and financial support, he said adding that there is no shortage in financing facilities to support SMEs development, be it from commercial lending or government initiated schemes.

In fact, entrepreneurs of today need to face the challenges by operating in a marketplace that is increasingly borderless in its reach with risks and opportunities coming from multiple facets and this is where the issue of 'character' will become an increasingly significant factor, stressed the Minister of Finance II.

He stated that Brunei has already recognised the huge potential in promoting and developing the Small and Medium Enterprises (SMEs) sector as a key component of its diversification policy.

Successful developments of this sector can serve as an engine of growth and significant source of employment for the population.

Highlighting the importance of SMEs, the minister said that according to a report by the Organisation for Economic Cooperation and Development (OECD) published in November 2006, SMEs constituted the dominant form of business organisation accounting for 95 to 99 per cent of enterprises in many countries and this has resulted in a 60 to 70 per cent of job creation in OECD countries.

Based on statistics in Brunei Darussalam, SMEs account for 98 per cent of all active business enterprises and have contributed to about 92 per cent of employment in the private sector and a little over 66 per cent of GDP within the non-oil sector of the economy.

However, in the context of the whole economy, that slice of the economic pie commanded by SMEs remains relatively small, said the minister.

SMEs are the backbone of all economies and the key source of economic growth and dynamism. In fact, small businesses are particularly important for developing innovative products and techniques and operate as active hamessers of intellectual capital.

Pehin Dato Awang Hj Abdul Rahman also urged financial institutions in the country to join in the effort and go beyond the traditional approach of merely providing debt-financing facilities.

He added that drawing from their vast resources, these financial institutions could provide proactive hands-on advice and guidance, thus complementing government agencies' efforts in providing capacity building programmes.

The success or failure of businesses will be in the hands of entrepreneurs and it is up to them to assume a high level of personal integrity and adopt a strong capacity towards business management especially financial discipline, he said.

"A true understanding and strict demonstration of financial discipline would always underpin a successful business," said the minister.

On the importance of the conference, the minister emphasised that the introduction of innovative Islamic banking and financing products will enhance opportunities for more SMEs to succeed in their business.

He highly commended and lauded the efforts of Islamic financial institutions and said similar financing modes have already proved successful and hence are increasingly favoured as an effective mechanism for SMEs financing. -- Courtesy of Borneo Bulletin

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