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and inevitably they feature on top of the list of barriers faced by Malaysian SMEs. Management problems
of cash flow and the slowing down of markets are also high on the list of challenges. According to an OIC
report innovation and technology adoption together with access to an innovation system are on top of the
list of challenges for Malaysian SMEs. These problems go hand in hand with low commercialisation of
R&D, a lack of know-how and resources and poor technology updates. Human capital development is
relatively low on the list but it is still a problem especially when work force readiness for change and
training issues are raised.
3.5. Barriers to SME development and exports in OIC countries: a summary
The following table lists a range of issues affecting the ability of MENA country SMEs. These issues are
arranged in four blocks – access to markets, access to technology and innovation; access to finance and
other challenges.
Table 3.12: Obstacles Faced by SMEs in the OIC Countries
Access to Markets
Access to Technology
and Innovation
Access to Finance
Other Challenges, Obstacles
and Problems
 Access to Market
 Obtaining reliable
foreign
representation and
maintaining control
over foreign
middlemen
 Identifying foreign
business
opportunities
 Limited information to
locate/analyse
markets
 Inability to contact
potential overseas
customers
 Keen competition in
overseas markets
 Lack of home
government
assistance
 Offering satisfactory
prices to customers
 Accessing export
distribution channels
 Difficulties in
enforcing contracts
 Lack of knowledge
on foreign market
requirements
 Limited business
development
services, marketing
and branding
 Excessive
transportation/
insurance costs
 Lack of ICT
adoption
 Lack of R&D
capabilities
 Low level of
innovation, know-
how and modern
technology
 Poor connection
between industry
and universities
 Low level of
knowledge transfer
between member
countries
 Weak patent
registration
process, ISO
standards,
certification, and
intellectual
property rights
(IPR) for SMEs
 Weak
infrastructure of
technology
business
incubation and
cluster
development
centre
 Lack of sustainable
microfinance
programmes
 Insufficient
information
dissemination and
transparency
 Lack of knowledge
concerning Islamic
and conventional
financial instruments
 Lack of policy and
strategy of
commercial banks to
deal with SMEs
 Lack of banking
capability to deal
with SME
peculiarities
 Lack of access to
the structural
financial products
(non-traditional
financial
 products)
 Lack of credit
guarantee schemes
for SMEs
 Lack of stock
exchange markets
for SMEs
 Inadequate
implementation of
coherent fiscal
policies for SMEs
 Weak business angels
networks
 Insufficient SME
database
 Cumbersome
bureaucratic red tape
 Lack of transparency in
input prices for SMEs
 Inadequate legal and
regulatory framework for
supporting SMEs
 Insufficient institutional
support
 Lack of bankable projects
 Limited capacity building
and training services
available to SMEs
 Insufficient public-private
partnership
 Lack of managerial
capabilities and skills
 Lack of promotion and
awareness programs on
the importance of SMEs
on the national economy
Source: COMEC (2012)