SMEs play a strategic role in Brunei's economy, defined as companies with 0-100 employees or fixed assets not exceeding $5 million. SMEs make up 98% of registered companies in Brunei and contribute significantly to GDP and employment. The government supports SMEs through various assistance programs and the Resource Centre to strengthen competitiveness and facilitate their growth. SMEs are important for economic development as they generate income and employment while promoting entrepreneurship and competition.
2. Small and Medium Enterprise (SMEs)
‘A small and medium enterprise (SME) is defined as a company
that has fixed assets not exceeding $5 million book value
and/or has a maximum of 100 employees’
BRUNEI
-‘SME can be defined as those enterprises having 1-100 employees’
-‘SME are companies that have fixed assets not exceeding BND 5 million
and /or have a maximum of 100 employees’
3. Small and Medium Enterprise (SMEs)
• Small and medium enterprises or SMEs
are companies whose headcount or
turnover falls below certain limits
• In Europe and USA, current definition
categorizes companies with fewer than 50
employees as "small", and those with fewer
than 250 as "medium“
5. SMALL BUSINESS SMALL and MEDIUM
ENTERPRISE
1. Number of employees Less than 20 people Maximum of 250 people
2. Place of business Small shop/home Own building/premise
3. Financial resources -Own savings as capital
-Loan from bank
-Loans from relatives, friends, etc
-Credit from suppliers of goods
-Profit of business
-Money contributed by
shareholders
-Profit of the business
-Sales of assets
-Sales of shares
-Loan and grants (eg banks)
4. Profitability Just to survive in business and to
make a reasonable living
As a firm grows larger, it increases
its turnover and adds to its profits
5. Market size Small Big
Small and Medium Enterprise (SMEs)
6. Small and Medium Enterprise (SMEs)
-The government has recognised the strategic role that small and medium
enterprises (SME) play in the overall economic growth of the country
-The Brunei government expects that the SMEs will continue to play a key role in
the country's economic development in this new millennium
-SMEs have also been identified as the major players in the industrial
development in Brunei Darussalam and have the potential in contributing
towards the diversification of the economy
-The development of small and medium enterprises will be enhanced through
provision of financial and infrastructure assistance, entrepreneurship training,
industrial incentive, technology improvement and other services and facilities
-Hence, the government has been encouraging economic diversification through
business services, financial services, hospitality and tourism, transport/logistics,
agro food and halal industries
7. Small and Medium Enterprise (SMEs)
-In 2008, there were at least 9,150 registered SMEs, which counted as 98.37%
of the total establishments
-Most SMEs were in the wholesaling and trading businesses, followed by
construction sector, mining, quarrying and manufacturing sector, community,
social and personal sector, agricultural, forestry and fishing.
-Brunei's SMEs also provides at least 70% of employment in the private sector.
In the service and manufacturing sectors, the contribution of SMEs is
estimated at 38 - 40%
8. Small and Medium Enterprise (SMEs)
The Government of His Majesty has recognised the significant role that SMEs play
in the economic development of the nation. It is therefore creating a good business
environment to strengthen the competitiveness of SMEs by providing
administrative support; investment and trading opportunities, technical assistance.
It is also currently exploring possibilities of financial assistance schemes for SMEs.
The Resource Centre of the Ministry of Industry and Primary Resources was
established on 2 May 1996 to provide facilities and expertise for facilitating the
growth and development of SMEs. Its scope of activities is therefore in technical
and entrepreneurial assistance. These covers training and technology transfer
services, incubation program, technical and entrepreneurial advisory services and
providing relevant information to SMEs.
9. Small and Medium Enterprise (SMEs)
-In Brunei, 98% of registered companies are considered to be small and medium
enterprise (SMEs)
-These businesses have between 0-100 employees
Distribution of SMEs in
Brunei
micro
small
medium
large
43.8%
2.23% 1.63%
52.3%
10. -As in other countries, SMEs in Brunei has a great contribution to the economy
-In 1994, SMEs contributed around 66.2 % to the nation's GDP
Small and Medium Enterprise (SMEs)
SMEs Contribution to
Brunei's Economy (GDP)
1994-1995
Large
Businesses
SMEs
32%
68%
11. Small and Medium Enterprise (SMEs)
The importance of SMEs for economic development
-For developing and transitional economies (particularly in Asia), SME
has a function to become a key component of wider economic
development and lessening of poverty
- SME can also acts as a major and sustainable generator of
employment and income
-SME can also serve as a useful bridge between the informal economy
of family enterprise and the formalized corporate sector
-SME may also be a source of foreign exchange earnings
12. Small and Medium Enterprise (SMEs)
The importance of SMEs for economic development
-SME helps promote competition and a culture of entrepreneurship,
which are conducive for economic growth
-SME are more willing to innovate than large enterprises and
conglomerates, hence, more business opportunities are being
exploited
-Size of SME sector in an economy appear to be positively associated
with Gross Domestic Product (GDP) per capita growth in many
countries
-SME creates job opportunities, which is a key dimension of the
development process of a country
13. Small and Medium Enterprise (SMEs)
-SMEs have a favourable impact on income distribution, because more
entrepreneurs with limited financial resources and technical skills can get
entry into the industrial sector through small enterprise operations
- SMEs can be regarded as training places for acquiring practical experience
in making economically sound decisions on technological and commercial
matters
- If SMEs handle and process locally available raw materials, this lessens the
weight and volume of the original raw materials to be imported and makes it
cheaper to produce. Sawn and pre-processed wood may be an example
14. Small and Medium Enterprise (SMEs)
- SMEs promote competition where entrepreneurs can compete and provide
quality products and this could prevent the emergence of the evils of
monopoly
- Brunei imports a variety of goods, some of which maybe produced within
the country. The development of SMEs may help the process of import
substitution
- Large firms may be able to get supply of components at a cheaper price from
the SMEs. The sub-contracts given to SMEs by large firms may reduce their
production costs
15. Small and Medium Enterprise (SMEs)
TYPES OF SMALL BUSINESS
Manufacturing
Service
Wholesaling
Retailing
Construction firm
16. Small and Medium Enterprise (SMEs)
Manufacturing
‘A manufacturing business is one involved in
using different raw materials to make a product/s
needed by the society’
Examples: manufacturer of furniture, sweets,
shampoo, fish ball etc
18. Small and Medium Enterprise (SMEs)
Service Business
‘Those that provide services in one way or
another’
Examples: Dress shop, barber shop, tutoring
services, etc
20. Wholesaling
‘Activities of those persons or establishments who buy in
bulk and sell to retailers and other merchants, and or to
individual, institutional and commercial users but do not
sell to final customers’
Examples: Wholesaler of soft drinks, mineral
water, cloth materials, etc
Small and Medium Enterprise (SMEs)
22. Small and Medium Enterprise (SMEs)
Retailing
‘Covers all of the activities involved in the sale of
goods and/or services to the final consumers’
Examples: Retail pharmacy, fast food chains,
appliance shop, grocery store, etc
24. Small and Medium Enterprise (SMEs)
Construction firms
‘Those engaged in the construction of buildings
whether for private individuals or for government’
Many of them perform sub-contracting jobs for
bigger contractors such as installing electrical
appliances and sewerage
