In Malaysia, 98.5% of the 920,624 business establishments are small and medium enterprises. Despite being the backbone of the national economy, SMEs in Malaysia are still experiencing a general lag in digital adoption. SMEs in the region have been underperforming prior to the pandemic that caused further exacerbation of business performance. Main impediments in business digitisation include higher costs and lack of technical skills and poor internet infrastructure across SEA except Singapore.
Even though SMEs in Malaysia are using cloud computing, most of them have not adopted SaaS to drive software process improvements according to the white paper “ Accelerating Malaysian Digital SMEs: Escaping the Computerisation Trap”.
As per Visa’s SMB Digital Banking Study conducted in September 2021, consisting of 500 SMEs, close to seven in 10 Malaysian SME expressed interest to bank with digital banks. Visa believes SME to be an important segment and wants to work with its banking partners and new digital banking players to help SMEs. Furthermore, 8 in 10 muslim SMEs who used Islamic banks as their main bank showed more interest to use digital banking than their non- Muslim counterparts. Shariah compliance is something that is proving to be a hassle for them.
Digital Transformation Initiatives by Government for SMEs
1. SME Business Digitalisation Grant
- Launched by Ministry of Finance, Malaysia in 2020 to assist SME to adopt digitalisation in their business operations
- Government provides a 50% matching grant of upto RM 5,000 per SME over a period of 5 years for the subscripion of digital services that will enhance their productivity and competitiveness
2. SME Technology Transformation Fund
- Run by SME Bank to provide financial assistance to SME to adopt digitalisation and/or automation in their business operation in achieving higher productivity
- SME Technology Transformation Fund can be used for computer hardware and software
- Financing limit ranges from RM 100,000 to RM 3.0 mn
SMEs are Digitizing
- Number of SMEs: 1.22 mn (97.4% of all enterprises)
- SME % contribution to GDP: 39%
- Share of employment by SMEs: 66%
- Share of SMEs in the early stages of digitalization: 77%
- Share of SMEs having dedicated digital strategy team: 25%
- Share of SMEs using cloud computing: 44%
Industry Players are embracing the opportunity:
Banks like CIMB, Public Bank, UOB and Telcos like Celcom, Digi and Mobile are providing a number of SaaS offerings to the SMEs.
Pain Points that still remain:
- Zero to low bargaining power on SaaS purchases
- SaaS expenses up by 14x in last 7 years
- No product differentiation for SMEs
- Limited rewards on commercial cards
- Limited product differentiation
- Limited reward/value prop for commercial users
How can Nuclei's SaaS Marketplace help?
- Businesses earn recurring discounts on SaaS purchases
- End to end partner management
- Plug and play integration
- Reduced expenses, recurring discounts
- Better visibility into growing SaaS expenses
- Beyond Banking: Launch a unique reward program
- Attract net new customers
- MDR + Commission
- Beyond Connectivity: Product differentiation
- Commission on each license