sources of capital &

support systems.
6.0 INTRODUCTION
• The government plays an important role in
ensuring that the entrepreneurial industry is
moving forward and able to compete in the
local and international arena.
• Encourages the participation of the society in
the economical development of the country.
6.1 SOURCES
OF CAPITAL
 Personal
funds/
savings

Stock Retirement
market accounts

Sources
of
capital
Banks and
Government other
loan financial
institutions

Family and
friends
Personal funds/savings

• First sources of capital.

Family and friends

• Easier to raise as it is based on

personal relationship and thrust
Retirement accounts

• Saved funds for retirement purposes.

• Use this money to fund the development of venture.
• If fails in business, he may have to live more frugally after
retirement.

Government loan

• Provides loans to assist entrepreneurs in running their

ventures.
• Government subsidized loans in bid to encourage investment
and development.
Government agencies

• Provides support through various agencies.

Banks and other financial institutions

• One of the external funding to initiate a new

business.
• Long-term financing
• Medium-term financing
• Short-term financing
Long-term • Funds borrowed from external sources generally
over a long period between 5 and 25 years.
financing

Medium-
• Loan made by an entrepreneur that ranges
term around 1 year and not exceeding 8 years.
financing

• Bank overdraft facilities are one of the most

Short-term typically and frequently used types of short-term
financing. The arrangement fees are high.
financing • Only pays interest on the amount actually
withdrawn.
6.2 BUSINESS
SUPPORT
SYSTEMS
 Financial
support
Entrepreneur
Extension and
and
advisory
management
services
training

Business
support
Research and Technical and
project technological
recognition support

systems
Marketing Informational
support support

Infrastructure
support
FINANCIAL SUPPORT
• Provided by financial institutions to start and perform a business.
• Assist in establishing the factory’s site, buying office equipment,
and purchasing machinery as well as for the capital turn over.
• Financial facilities provided by banks and agencies in Malaysia:-
AGENCY FINANCIAL FACILITY
Majlis Amanah Rakyat (MARA) Provides assistance in the form of loans and
equipment to SME entrepreneurs.
Commercial Banks Provide loans that are located by the Central
Bank of Malaysia (BNM) to be distributed to
qualified applicants.
Bank Pembanggunan dan Infrastruktur Gives financial credit to industrial businesses
Malaysia Berhad (BPIMP).
Malaysian Industrial Development Provides fixed asset financing to
Finance Berhad (MIDF). manufacturers in Malaysia.
Bank Pertanian Malaysia (BPM). Gives financial assistance and equipment to
agriculture-related industries.
 ENTPRENEUR & MANAGEMENT TRAINING
• Provided to train entrepreneurs to obtain the necessary skills in relevant field and
knowledge in the area of management.
• Build the entrepreneurs’ confidence an give them encouragement
• Entrepreneur and management training provided by agencies in Malaysia:-

AGENCY ENTPRENEUR & MANAGEMENT TRAINING

Majlis Amanah Rakyat (MARA) Provides training and guidance to SME

Malaysian Entrepreneurship
Development Center (MEDEC)
State Economic Development
Corporation (SEDC)
National Productivity Corporation
(NPC).
entrepreneurs so that they are highly skilled in
their area interest.
Plans and implements entrepreneurship
developments programmes such as training,
education, research, and consultancy.
Provides and promote commercial, industrial and
socio-economic development in the states.
Provides training in enhancing quality and
productivity, consultation and guidance in Total
Quality Management (TQM)
 TECHNICAL & TECHNOLOGY SUPPORT
• To exposed the latest production methods and
systematic management.
• To learn about the latest technological
advancement in manufacturing and
management field.
• Technical assistance provided in Malaysia:-
AGENCY TECHNICAL ASSISTANCE

Palm Oil Research Industry Malaysia
(PORIM)
Forest Research Institute of Malaysia
(FRIM)
Malaysian Institute of
Microelectronic system (MIMOS)
Develops quality products using the latest
technological advancement.
Promotes sustainable management and the
optical use of forest resources
Promotes innovation in information technology.
Strives to be applied research centre in frontier
technologies.
INFRASTRUCTURE SUPPORT
(LOCATION & PREMISE)
• Help the entrepreneur to decrease issues and
problem related to the premise and industrial site.
• Infrastructure assistance provided by agencies in
Malaysia:-
AGENCY INFRASTRUCTURE ASSISTANCE

Urban Development authority (UDA)
Majlis Amanah Rakyat (MARA)
State Economic Development
Corporation (SEDC)
Provides & carries out projects at urban
settlements (development, housing,
commercial, & industrial issues).
Provides business sites to carry out
business activities.
Develops basics utilities and area like
pathway and recreational facilities.
MARKETING SUPPORT
• Marketing: effort which is performed to penetrate the sale
of products or services offered by the business.
• Purpose: to help an entrepreneur distribute & market his
products locally and internationally.
• Marketing assistance provides by agencies in Malaysia:-
AGENCY MARKETING ASSISTANCE

Federal Agriculture Marketing Markets agriculture products locally and abroad.

Authority (FAMA)
Malaysian External Trade
Development Corporation
(MATRADE)
Ministry of International Trade
and Industry (MITI)
Expose the entrepreneur to available business
opportunities.
In charge of affairs related to foreign trade, high
technology, environmental protection and industry
location, energy & other areas.
RESEARCH AND PROJECTS RECOGNATIONS
• Purpose: help the entrepreneur to increase the
efficiency, technological achievements, production as
well as produce better quality products.
• Research agencies provided by agencies in Malaysia:-
AGENCY RESEARCH ASSISTANCE

Malaysian Agricultural Carries out research n the output of agricultural

Research and Development products, improves the quality of agriculture
Institute (MARDI) products, and produces new seeds for farmers.
Rubber Research Institute Carries out research on the quality of rubber and
Malaysian (PRIM) produces new rubber-based products.
Malaysian Palm Oil Board Carries out research on products produced from the
(MPOB) out put palm oil, spreads over the markets, and
improves the quality o palm oil.
Standard and Industrial Focus on discovering and developing new
Research Institute of technologies to enable industries to move up yha
Malaysia (SIRIM BERHAD) value chain.
 INFORMATIONAL SUPPORT
• Offered to an entrepreneur in the form of business
opportunities, statistics, discovery, research and
technological developments.
• Informational assistance provided by agencies in Malaysia:-
AGENCY INFORMATION ASSISTANCES
Forest Research institute of Provides research and development, transfer of
Malaysia (FRIM) technology and testing services for the forest and
timber industry.
Malaysia Industrial Development Provides information on business opportunities.
Authority (MIDA)
Malaysian External Trade To organize training programes to improve
Development Corporation international marketing skills of Malaysian exports.
(MATRADE)
Standards Industrial Research Ensures the quality of local products, penetrate the
Institute of Malaysia (SIRIM) market potentiality, and provides information on
new discoveries in production.
EXTENSION AND ADVISORY SERVICES
• Consulting and monitoring the implementation of the
proposed projects to ensure no hiccup happens while
carrying out the business operations.
• Extension and advisory assistance provided by agencies
in Malaysia;
AGENCY EXTENSION AND ADVISORY ASSISTANCES

Majlis Amanah Rakyat (MARA) Apprenticeship training scheme, technical

Malaysian Palm Oil Board
(MPOB)
Federal Agricultural Marketing
Authority (FAMA)
Department of Agriculture
(DOA)
entrepreneurs programme
Technical advisory services.
Enhancements of product image and presentation,
vendor programme, development of quality
products.
Follow-up on entrepreneurial training and
development programme.
6.3 INCENTIVES IN
ENTREPRENEURIAL
ACTIVITIES
PIONEER • Tax exemption to a new industry.
STATUS

• Limit on the quantity of products.

QUATO • Helps to protect domestic market.

• Duty or tax that are imported into the country.

• Maximum amount of a products that can be
EMBARGO imported or exported.
 • Tax imposed on goods that
TARIFF/IMPORT are imported into the
DUTY country.
• Paid directly by the importer.

• Assistant given to a local

EXPORT entrepreneur which helps
ENCOURAGEMENT him sell his products
overseas.
6.4 FINANCING
FACILITIES
 FINANCING FACILITIES
• Financing facility refers
– A loan extended by a bank or financial provider to
a business in need of operating capital.
– Different banks or agencies have different facility
plans for their clients who own or run businesses.
Supplier credit

• Term: buyer’s purchase of goods from a seller or

supplier who finances by delaying the date at
which the price is due, or by allowing payment
in instalments.

Overdraft

• Short-term financing of working capital.

• Current account exceeding their available cash
balance.
Term Loan

• A term loan is a medium- or long-term

• Given to entrepreneurs who finance their fixed asset
or working capital needs.
• 2 categories:-
• i) loans with mortgage ii) loans without mortgage

Hire Purchase

• Transaction in which the purchaser pays an initial

deposit and takes of the goods.
• Subsequent instalments are made over a specified
time period.
LEASING
• To procure assets without having worry about
maintenance and repair costs.
• Known as a contract under.

FACTORING
• Entrepreneur with a limited amount of capital.
• Arrangement where by the debts of business are
collected by a factor business.
• Short-term loan.

GOVERNMENT LOAN

• Aiming to assist projects , promote growth &

improvement in rural areas
• Can obtain funds from a variety sources.
• Find a source of funding which is appropriate
with his needs.
• Business support systems are one of the
resources that can be used by an
entrepreneur to obtain loans and assistance.
• Help to prosper and support the nation’s
economic growth.
• New venture will be safer if it passes through
the business support systems.