The role of Small and Medium Enterprises (‘SMEs’) in the Malaysian economy is undoubtedly important. It assumes a significant role in the country’s industrialization program as it represents the largest percentage of establishments at 99.2%.

In terms of their economic contribution, SMEs contribute 32% to the Gross Domestic Product, 56.4% to the total workforce, and 19% to total exports. Based on the Census on Establishments and Enterprises 2005, there are a total of 552,849 companies in operation. Out of this, a total of 548,307, or 99.2% were defined as SMEs.

Referring to the statistics published by SMIDEC, the leading fraction of Malaysian SMEs is in the services sector (86.6%), followed by the manufacturing sector (7.2%), and final but not least the agriculture sector (6.2%). In the services sector, the majority of SMEs were in retail, (46.4%), followed by restaurants (14.2%), wholesale (9.1%), transport and communications (6.5%), and financial intermediaries (4.1%).

Whilst in the manufacturing sector, textile and apparel represent the largest sub-sector (23.4%), followed by food and beverage (15%), metal and metal products (13%), and paper and recorded media (7.2%). For the agriculture sector, the primary activities are mainly in planting, market plantation, and horticulture (65.6%), followed by fisheries (20.8%) and poultry farming (7%).

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