SMEs Still Moaning About Loans
By Sonia K.

Bandar Seri Begawan - "While I have no doubt that SMEs have genuine problems on access to finance, we must also ask why that is so. In my view, some Brunei SMEs continue to encounter difficulty in obtaining finance because they have not really submitted business proposals that have credible chance of success in the marketplace.

"I believe that banks and financing institutions are always willing to provide capital to business proposals that offer highly attractive and competitive products in the market." This was highlighted by Dato Paduka Awg Haji Mohd Hamid bin Hj Mohd Jaafar, Permanent Secretary at the Ministry of Industry and Primary Resources, who was the guest of honour during the opening of the two-day 2006 SME Partnership Programme.

In January this year, the ASEAN EC Management Centre produced a report on the study "Challenges to Brunei SMEs". That study sent out questionnaires to some 302 enterprises, and 69 responded.

One of the questions asked the SMEs to assess and rank, in order of importance, the difficulties they encountered in business. Issues related to markets and marketing again were only ranked 5`h 7" and 8`h out of the 10 challenges they faced. Once again, SMEs rate access to low-cost finance as their number one problem, he said.

"These two studies, conducted 6-7 years apart, maintain that access to affordable financing is the top problem of Brunei SMEs. The studies justify our continuing effort at improving the current financial schemes as well as developing other financial assistance packages for our SMEs.

"However, the two studies also point to the fact that a majority of our SMEs had relegated markets and marketing to be less in importance than the availability of affordable financing," the Permanent Secretary said.

Dato Paduka Awg Haji Mohd Hamid said this observation is supported by "our data on the financial assistance schemes launched by the Ministry of Industry and Primary Resources in 1999.

"As of March 2006, out of the B$29.1 million released to participating banks, only around 67 per cent of that amount had been awarded to 324 SMEs. These 324 SMEs represent only about 4.48 per cent of the total number of SMEs reported in 2003 (7,240).

"While His Majesty's Government is ready to invest more funds in those financing assistance schemes, it would be difficult to do so without economically viable business projects from Brunei SMEs," he added.

"For that reason, I believe that the number one concern of an SME before submitting a business proposal should also be to have the right product or range of products for the market. In other words, SMEs should be equally concerned with issues related to markets and marketing before looking for financing. This requires SMEs to study the market and marketing aspects of various industrial sectors.

"To a certain extent, this could be a formidable task for majority of SMEs. In helping out, His Majesty's Government has initiated a study on the `Development of Market/Marketing Support Services for Brunei SMEs'.

"The study should enable the Ministry of Industry and Primary Resources to establish a `functioning market/marketing support services for our SMEs that I hope could include useful training and advisory services on markets and marketing," the Permanent Secretary said.

The two-day programme held at the Empire Hotel and Country Club entitled "Brunei: A Leap into the Future of Marketing Communications" which ends today, is attended by more than 30 participants from various organisations. It is being conducted by Mr Wempy Dyocta Koto from Young and Rubicam, Asia Pacific.

During the opening ceremony, welcoming remarks were also delivered by CEO of Asia Inc Forum, Allan Lai, as well as short remarks from programme partners; Hj Zainal Abidin Hj Mohd Ali, Deputy Managing Director of Brunei Shell Petroleum Co Sdn Bhd, Mr Pierre Imhof, General Manager of Baiduri Bank Berhad, and Mr John Perry, CEO of Brunei Economic Development Board. -- Courtesy of Borneo Bulletin

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