The roles and functions of government agencies in strategic entrepreneurship

1. STRATEGIC ENTREPRENEURSHIP
TOPIC9
DR ANIS AMIRA AB RAHMAN
EZANI BIN YUSOFF
FACULTY OF ENTREPRENEURSHIP AND BUSINESS
UNIVERSITI MALAYSIA KELANTAN
anisamira@umk.edu.my
Dr Anis Amira Ab Rahman 14

2. THE ROLES AND FUNCTIONS OF
GOVERNMENT AGENCIES IN
STRATEGIC ENTREPRENEURSHIP
Dr Anis Amira Ab Rahman 14

3. INTRODUCTION OF FINANCIAL
 The financial services sector is the bedrock of any
economy. It is a key enabler of the overall economy,
providing capital (in various forms) to enable the growth
of all other industries (as well as consumers) in the
economy.
 All large successful economies require strong banks,
vibrant capital market and well-functioning financial
infrastructure.

4. Background
 Bank-credit refers to loans, advances and discounts
(LAD) of specified sums, terms and other condition made
available to individuals and entrepreneurs to start, grow
or sustain any productive activity.
 Funds are necessary for the smooth running of any
business, and often such funds must come in form of
bank-credit or any other financial institutions.

5.  In financial economics, a financial institution acts as an
agent that provides financial services from its clients.
Financial institutions generally fall under financial
regulation from a government authority
Types of Financial Institutions
 Common types of financial institutions include banks,
Insurance Co., leasing Co, Investment Co, & Mutual Funds

6.  In financial economics, a financial institution acts as an
agent that provides financial services from its clients.
Financial institutions generally fall under financial
regulation from a government authority
Types of Financial Institutions
 Common types of financial institutions include banks,
Insurance Co., leasing Co, Investment Co, & Mutual Funds

7. Banks
▪ A bank is a commercial or state institution that provides
financial services, including issuing money in various forms,
receiving deposits of money, lending money and processing
transactions and the creating of credit.
Commercial Banks
▪ A Commercial bank accepts deposits from customers and
in turn makes loans, even in excess of the deposits; a
process known as fractional-reserve banking. Some banks
(called Banks of issue) issue banknotes as legal tender.

8. Investment Banks
▪ Investments banks helps companies and governments
and their agencies to raise money by issuing and selling
securities in primary market. They assist public and
private corporations in raising funds in the capital markets
(both equity and debt), as well as in providing strategic
advisory services for mergers, acquisitions and other
types of financial transactions

9. Islamic Banks
▪ Islamic banking refers to a system of banking or
banking activity that is consistent with Islamic law (Sharia)
principles and guided by Islamic economics. In particular,
Islamic law prohibits usury, the collection and payment
of interest, also commonly called riba in Islamic disclourse.

10. Financial Institution Functions
▪ Financial institutions provide a service as intermediaries
of the capital and debt markets. They are responsible for
transferring funds from investors to companies, in need of
those funds. The presence of financial institutions facilitate
the flow of cash through the economy.
▪ To do so, savings account are pooled to mitigate the risk
brought by individual account holders in order to provide
funds for loans. Such is the primary means for depository
institutions to develop revenue.

11. BUSINESS FUNDING IN MALAYSIA
 The financial landscape for SMEs in Malaysia is
comprehensive, supporting the various business needs
of SMEs along the different stages of the business cycle.
Credit to SMIs
 Pro-active in loan evaluation processes by the financial
institutions helps increasing the flexibility in extending loans to
SMIs. Also, the Government established the Rehabilitation
Fund for Small and Medium Industries (RSMIs) in 1998, with
an initial allocation of RM750 million to assist SMIs which were
viable but face difficulties in obtaining credit facilities.
(The Development of Malaysia Economy by Poon Wai Ching, Prentice Hall, 2005)

12. Selected Government Agencies Supporting SMEs
 The support of the local government is vital in ensuring the
successful development of SMEs in any country. Currently, at
least 18 local ministries and 60 government agencies are
actively involved in the development of Malaysian SMEs.
 The SMEs in Malaysia are fortunate to have the full support of
the local government in all aspects of their operations. The
government ministries and their agencies provide assistance in
disseminating information, technical expertise, training,
financing, etc.

13. Financial Assistance by Government Ministries & Agencies
 To support the development of SMEs, the Government provides a
comprehensive set of programmes through the various of
Government Ministries and Agencies, which are broadly
categorized into "Financial Assistance" and "Business Support
Services". Below are some of the ministries and government
agencies that support SMEs:
Ministry of International Trade and Industry (MITI)
 SME Corp. Malaysia
 Bank Perusahaan Kecil & Sederhana Berhad (SME Bank)
 Malaysia External Trade Development Corporation (MATRADE)
 Malaysian Industrial Development Authority (MIDA)
 Malaysian Industrial Development Finance Berhad (MIDF)

14. Ministry of Finance (MOF)
▪ Bank Pembangunan Malaysia Berhad (BPMB)
▪ Amanah Ikhtiar Malaysia (AIM)
▪ Export-Import Bank Malaysia Berhad (EXIM Bank)
▪ Malaysia Debt Ventures Berhad (MDV)
▪ Malaysian Venture Capital Management Berhad (MAVCAP)
▪ Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN)
Ministry of Agriculture and Agro-based Industry
(MOA)
▪ Agrobank Malaysia
…….continue

15. Ministry of Science, Technology and Innovation (MOSTI)
▪ Ministry of Science, Technology and Innovation (MOSTI)
▪ Malaysian Biotechnology Corporation Bhd (MBC)
▪ Malaysian Technology Development Corporation Sdn Bhd
(MTDC)
▪ MIMOS Berhad (MIMOS)
▪ Multimedia Development Corporation (MDeC)
Ministry of Rural and Regional Development (MRRD)
▪ Majlis Amanah Rakyat (MARA)
…….continue

16. …….continue
Ministry of Plantation Industries and Commodities
(MPIC)
▪ Malaysian Timber Industry Board (MTIB)
Ministry of Domestic Trade Co-Operatives and
Consumerism (KPDNKK)
Agency
● Bank Negara Malaysia (BNM)
● Perbadanan Usahawan Nasional Berhad (PUNB)
● Credit Guarantee Corporation Malaysia Berhad (CGC)
● Commerce Asset Ventures Sdn. Bhd.
● Mayban Ventures Sdn. Bhd.

17. The roles and functions of government agencies
Information Sources
 Assistance
Training, consulting, and mentoring provided by
experienced executives and entrepreneurs
 General information
Start-up assistance on Web-based resources
 Industry and market information
Available on industry and market databases

18.  Competitive company and product information
Provided by external sources
 Industry and market information
Available on industry and market databases
 Competitive company and product information
Provided by external sources
 Government sources
…….continue

19. …….continue
 Search engines
Enable searching the needed industry, market, and
competitive information
 Trade associations
Provide country-specific industry data
 Trade publications
Provide information and insights on trends and
companies, perspective on the particular market and
market conditions

20. Business Support System
 Information and assistance is readily available for
entrepreneurs, particularly those starting a new venture.
 The role and functions of government are important to
support entrepreneurs in identifying an appropriate
opportunity. The assistance takes the form of technical,
marketing, infrastructure, information, Research &
Development, Financial and advisory.

21. SIRIM. MARA,
Techno. Park,
MARDI, RRI, FRIM
etc.
Technical
Assistance
Offered to
entrepreneurs or
potential
entrepreneurs to
expose them to
production methods
and systematic
management.
MITI, MATRADE,
SME Corp., FAMA,
GUTHRIE and etc.
Marketing
Assistance
The aim of marketing
assistance is to help
entrepreneurs
distribute and market
their products and
services local and
internationally

22. MARA, SEDC,
SIRIM, UDA,
Techo. Park,
KKLW, BPIMB,
MIDA and etc.
Infrastructure
Assistance
Provide facilities to
assist entrepreneurs
in getting business
premise
MITI, MATRADE,
MARDI, SIRIM,
SME Corp., MIDA,
FRIM, Local higher
Learning
Institutions and etc.
Information
Assistance
This information
assistance is made
available to
entrepreneurs in the
form of business
opportunities, statistics,
new research findings,
new technology and
etc.

23. MARDI, SIRIM,
Local Higher
Learning
Institutions and
etc.
Research &
Development
Developed
entrepreneurs in
conducting R&D in
term of new method of
production process,
cost reduction, quality
and safety and etc.
Commercial banks
, Finance
companies ,
Government
agencies and
Venture capitalists
Financial
Assistance
The purpose of financial
assistance is to provide
financing facilities to
entrepreneurs in
constructing and
implementing their
business ideas.

24. MEDEC, MARA,
KPUn, SEDC, SME
Corp. and etc.
Advisory
services
Provide business
advisory and
disseminate
information on
Government funds
and incentives on
SMEs to
entrepreneurs.
Applicants will
receive business and
technical advisory
services, aimed at
enhancing their
business potential.

25. REFERENCES
 Rensburg, D.J.V. (2013). Is Strategic Entrepreneurship a Pleonasm?. Journal of Management and
Strategy, 4, 1, 15-27.
 Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice. Mason,
Ohio: Thomson/South-Western
 Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: Origins, core elements and
research directions. European Business Review, 22, 1, 43-63
 Dollinger, M, J. (2008). “ENTREPRENEURSHIP: Strategies and Resources Fourth Edition”, Kelley School
of Business, Indiana University. MARSH publications, pp. 33-40.
 Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2009). Entrepreneurship. New York: McGraw-Hill Higher
Education.
 Zimmerer, T., Scarborough, N. M., & Wilson, D. (2002). Essentials of entrepreneurship and small business
management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.
 Barringer, B and Ireland, D (2012) Entrepreneurship – Successfully Launching New Ventures (4th Ed.).
Pearson Education, Global Edition. (B1)
 Dollinger, Marc J., (2003) Entrepreneurship: Strategies and Resources, 3rd Edition, Prentice Hall
International Edition. (B2)
 Wickham, P. A. (2006) Strategic Entrepreneurship. (4th. Ed.). England: Pearson Education Ltd. (B3)
 Timmons J, Spinelli S, (2007) New Venture Creation: Entrepreneurship for the 21st Century, 7th. Edition,
McGraw Hill International Edition.
 Fundamental of Entrepreneurship, UiTM Entrepreneurship Study Group
Dr Anis Amira Ab Rahman 14