What is SME?


What is SME

The word SMEs stands for small and medium enterprises.

Businesses that fall under this category usually have the following criteria:

Manufacturing: Sales turnover does not exceed RM50 millions OR the number of full-time employees does not exceed 200.

Services and other sectors: Sales turnover does not exceed RM20 millions OR the number of full-time employees does not exceed 75.


Previously, SMEs has been defined as:

Micro enterprises: with a sales turnover of less than RM 250k or less than 5 employees.

Small enterprises: with a sales turnover of less than 10 m or have 5-50 employees.

Medium enterprises: with a sales turnover of 10m – 25m or have 51-100 employees.

However, SMEs had been redefined by the Prime Minister, YAB Dato’ Seri Haji Mohd Najib bin Tun Haji Abdul Razak on July 2013. Check out the new definition which took effect from 1 Jan 2014 onwards.


Micro: Sales turnover < RM300k / < 5 employees ( Manufacturing ), Sales turnover < RM 300k / < 5 employees ( Others )

Small: Sales turnover RM300k – < RM 15m / 5-75 employees ( Manufacturing ), Sales turnover RM300k – < RM 3m / 5-30 employees ( Others )

Medium: Sales turnover RM 15m – not exceed RM 50 m / 5- 200 employees ( Manufacturing ), Sales turnover from RM 3m – not exceed RM 20m / 30-75 employees ( Others )


  • A Variety of challenges faced by SMEs are:
  • Innovation & Technology Adoption: New, Existing and Old Technology
  • Access to Financing: Budget, Money, Project & Events Management
  • Legal & Regulatory Environment: Career, Service Procedure, Quality and Control
  • Human Capital Development: Human Resources
  • Access to Market: Sales, Marketing, Customer Service, Support Team
  • Infrastructure: Hierarchy, Job Scopes, Job Routes


Among the initiatives to create globally competitive SMEs are:

  • increase business start-ups and boost business dynamism through a continuous flow of new entrants into the market.
  • expand the size and scale of businesses and their potential.
  • raise labour productivity of SME to boost incomes and improve standard of living.
  • promote innovation, growth and fair competition.

SMEs play an important role in the country as it is the major economic growth driver. As the driving force of innovation, job creation and domestic demand, SME development is therefore of utmost importance and must be encouraged at all time.

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