By Saha Dhevan Meyanathan
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Additional resources for Industrial Structures and the Development of Small and Medium Enterprise Linkages: Examples from East Asia (Edi Seminar Series)
Example text
B. Support Institutions As noted above, there has been a proliferation of agencies (thirty) and ministries (thirteen) involved with the development of SMEs. Two conclusions can be derived from this intervention. First, due to the strong role played by the state during the second phase of development, institutional effectiveness and accountability were accorded a secondary role. Duplication of functions across the various levels of government was a normal occurrence. Little attention was paid to the fit of objectives of organizations to their structure, strategy, and the needed skills to achieve the objectives; as a corollary to this problem, a complete overhaul of the institutional delivery mechanism has to be undertaken through a comprehensive and integrated SME development plan— with the phasing out of, and the rationalization of, certain agencies.
We provide an analysis of the training schemes below. Entrepreneurial and Business Management Training Three institutions specialize in providing entrepreneurial training for potential entrepreneurs. 15 Participants, who usually have a secondary−level education, are required to have a business proposal and an interest in, and basic knowledge of, technical and business concerns. Graduates of the course receive certificates that are recognized by banks and may assist them in gaining loans for business start−up.
Central Bank Guidelines for Priority Sector Lending The activist role taken by the Central Bank during the second phase also saw the introduction of specific guidelines for priority sector lending in 1974. 11 The Central Bank also imposed penalties for failure to comply with the guidelines. Banks and finance companies that did not meet the targets were required to place deposits in the Central Bank equal to their respective shortfalls for a period of one year at zero percent interest. The funds so deposited were on−lent to those banks and finance companies that exceeded their targets.