Malaysia

Population: 
30,187,896
Number of Business Networks: 11
Number of Private Sector Initiatives: 7
Number of Government Services: 7
Labor Force Participation Rate: 
47

Introduction

Malaysia is growing quickly, opening doors for male and female entrepreneurs alike. More...

Malaysia is growing quickly, opening doors for male and female entrepreneurs alike. The World Economic Forum’s 2015–2016 Global Competiveness Report ranked Malaysia as the most competitive economy in developing Asia and the 18th globally. Since independence in 1957, Malaysia has recorded one of the highest growth rates in Asia, expanding at an annual average of 6.5 percent.

SMEs are vital to Malaysia’s economy, contributing 32 percent to GDP. They account for 99 percent of all businesses, and employ 56 percent of the workforce. Yet women’s participation in SMEs as entrepreneurs is limited. The total early stage entrepreneurial activity (TEA) of women in Malaysia—defined as the working age population starting an entrepreneurial activity and those running a new business less than 3 ½ years old—is only 6.78 percent, much lower than the TEA for women in Thailand (22.1 percent) and the Philippines (20.8 percent). Further, World Bank data show that, as of 2014, just 44 percent of women over 15 participated in Malaysia’s labor market, a lower rate than in 2000. In addition, woman-owned businesses are often in less profitable sectors than men’s, largely in services (91.7 percent of women’s businesses) and manufacturing (6.2 percent). The potential for women entrepreneurs in Malaysia is nonetheless significant. The growth rate of women’s SMEs in Malaysia is quite high at 9.7 percent. This is 2 percentage points higher than the growth rate for men’s SMEs.

 

Women in Malaysia face a number of barriers to more active participation in the workforce. According to the OECD, low rates of women in the workforce are largely due to difficulties reentering after a break and to inflexible work conditions. A 2013 study on retaining women in the worforce by Malaysia’s Association of Chartered Certified Accountants found that a lack of gender and inclusion programs in Malaysian workplaces impedes retention of female employees. The study also found that the main reasons women leave their jobs is to raise a family or care for a family member, or because they generally lack opportunities for work-life balance. A 2012 study by the University of Toronto’s Rotman School of Management found that cultural norms encourage women to be less assertive and take on fewer leadership positions. This study also found a tendency for a woman’s male relative to take over her business when it grew larger than micro.

Inadequate access to finance very often constrained women entreprenuers, The Asia Foundation and APEC’s 2013 research found, and certainly in Malaysia where high interest rates were reported to be the biggest challenge. In addition, application paperwork was cited as a major problem for women: more women business owners (by a 28 percentage point difference) and more women exporters (by a 47 percentage point difference) cited paperwork as an obstacle to obtaining loans than did their male counterparts. On a positive note, the importance of role models, and in particular female role models, was particularly highlighted in Malaysia with women owners being more likely to have a female relative in business than men owners were by a difference of 26 percentage points.

There is strong evidence that, with support, women’s businesses could make significant contributions to Malaysia’s economy. According to Malaysia’s Ministry of Trade and Industry, efforts to support women entrepreneurs have contributed to a 55 percent increase in the number of woman-owned SMEs since 2005. The government of Malaysia has responded proactively to the need to boost women’s participation in the workforce. A 2013 Forbes article notes that, in Malaysia, “cultural and socio-economic forces have combined to allow for radical experimentation in female entrepreneurship. …Malaysia is preoccupied with entrepreneurship.” For example, Malaysia’s 10th Malaysia Plan has the goal of increasing women’s participation in the workforce to 55 percent in 2015, which has helped to spur the government into action. This is expressed in the government’s commitment to support business innovation, to build the capacity of the workforce, and in the willingness of the government to take bold measures toward economic development. Malaysia is also looking to increase the use of technology by woman-run businesses, a response to the relatively low percentage of Malaysian businesses that are currently online, and has allotted RM 50 million (US$16.34 million) toward this goal through the “Get Malaysian Business Online” campaign.

Evidence of the need for continued support of the business sector is clear in The Asia Foundation and APEC’s 2013 survey, which found dissatisfaction among Malaysian entrepreneurs in general and women entrepreneurs in particular. The survey found that 40 percent of Malaysian entrepreneurs considered the government to be unsupportive of business or even hostile toward it. Women entrepreneurs were less likely than male entrepreneurs, by an 18 percentage point difference, to say that the government was “supportive” or “very supportive.” Complicating the challenge of supporting women’s entrepreneurship in Malaysia are the cultural dynamics in the economy. Malaysia is a multicultural society largely composed of Malays, Chinese, and Indians. Women’s employment varies by region with 48.5 percent in employment in urban areas and 41.2 percent in rural areas. As will be observed in this report, certain assocations target specific women’s groups such as Bumiputera, the indigenous Malay group, or Chinese-Malaysians. In addition, Malaysia is a Muslim state. This leads to some persisting conservative gender norms such as limited divorce rights, unequal inheritance for Muslim women, and unclear land rights for women in the case of divorce or death of husband. 

Business networks are important to the success of women entrepreneurs in Malaysia. Findings show that networks help in making connections and imparting business skills and knowledge critical for success. The Asia Foundation and APEC’s research in Malaysia shows that most businesses there considered the primary benefits of membership in business associations to be access to both information and training on regulations, policies, and taxes. While women are often less connected to networks than men, the benefits of joining these associations are significant. In addition to formal networks such as associations, findings show that informal networks are also very important to entrepreneurs in Malaysia. Women business owners who engaged in informal networking in Malaysia were more likely, by 25 a percentage point difference, than those that did not engage in informal networks to report that they planned to expand their operations over the next three years. The findings also indicate that businesses in Malaysia often join associations when their businesses get larger or expand into export, indicating a gap in utilization of business associations by small or medium businesses that haven’t yet developed into exporting.

Malaysia offers a number of business networks and associations that work to connect women entrepreneurs and support development of their business skills. Some are open to all women entrepreneurs while others target specific cultural groups. 

Networks that support women’s access to capital and assets: 

No information available. Contact us if you know of a network that fits this criteria.

Networks that support women’s access to markets: 

Based in Kuala Lumpur, FEM is one of the primary associations for women entrepreneurs in Malaysia. FEM is an umbrella organization of nine women’s business associations across...more

The Malay Chamber of Commerce was established in 1957. The chamber aims to support Malaysia’s business environment, including professionals and traders, at the state, national, and international levels. The chamber represents its members’ interests in business and trade...more

Based in Kuala Lumpur, NAWEM was founded in 1993 after participants in a 1990 National Symposium of Women Entrepreneurs of Malaysia expressed the need for such a group. It is the primary women’s business association of Malaysia and is multicultural. NAWEM says its...more

Usahanita is a Bumiputera Women Association in Malaysia which was registered in 1984 and is under the umbrella of the Federation of Women Entrepreneurs Malaysia (FEM). The association has over 3,000 members across Malaysia. Members are drawn from a range of sectors...more

Networks that support strengthened capacity and skills for women in business: 

Established in 2003 and based in Kuala Lumpur, WENA is a nonprofit organization whose aim is to support women’s rights in business and professional spheres. Members are both new and established entrepreneurs. WENA is founded on four pillars: (1) Support the development...more

Meetup.com provides an opportunity for like-minded people to connect. The Malaysia Entrepreneurs Network Monthly Meetup is one such meet-up which has engaged 712 entrepreneurs in Malaysia. As of early 2015, the group had met 41 previous times and had 12 future meetups...more

Founded in 1980, Peniagawati is an Association of Bumiputera Professional Women in Malaysia. Membership is open to all Bumiputera women entrepreneurs who have companies registered with the Companies Commission of Malaysia, or who are professionals or managers. The...more

Formerly the SMI Association of Malaysia, the SME Association of Malaysia (“SME Malaysia”) was established in 1995 to provide support and services for SMEs in Malaysia. The Association organizes conferences, awards, and exhibitions, and undertakes local projects toward...more

This organization supports Bumiputera women entrepreneurs. It represents 2,000 women entrepreneurs and runs various events to support them. more

Networks that support women’s leadership, voice and agency: 

No information available. Contact us if you know of a network that fits this criteria.

Networks that support women and innovation and technology: 

With a mission to “empower women entrepreneurs with ICT,” EWA’s objectives are to: (1) Connect Malaysian women entrepreneurs who are involved in online business; (2) support women entrepreneurs’ use of online business; (3) train members to use ICT for business...more

GBG Malaysia is a network of professionals, entrepreneurs, and others who aim to become more successful in using web technologies and the internet to develop their business. The group is recognized but not managed by Google and has seven chapters across Malaysia. Sample...more

The private sector in Malaysia is very active in supporting women entrepreneurs’ skills development, including their ability to use technology to increase their business’s online presence. Services target both larger businesses as well as microenterprises that seek to support low-income segments of the population. 

Initiatives that support women’s access to capital and assets: 

AVPN is a unique funders network headquartered in Singapore that seeks to increase the flow of financial, human and intellectual capital to the social sector across the Asia Pacific region. We promote venture philanthropy in the broader philanthropic and social...more

The Global Women Entrepreneur Leaders (GWEL) Scorecard, sponsored by Dell Inc. and produced by ACG Inc., is a new data driven diagnostic tool that identifies the impediments to high impact female entrepreneurship and introduces actionable steps that can be taken to...more

Established in 2011, the Malaysian Chinese Women Entrepreneurs Foundation provides business opportunities and micro loans to Malaysian Chinese women in order to support them to start or expand their businesses. Microloans of RM 5,000– 10,000 (US$1,395–$2,800) are...more

Initiatives that support women’s access to markets: 

The Global Women Entrepreneur Leaders (GWEL) Scorecard, sponsored by Dell Inc. and produced by ACG Inc., is a new data driven diagnostic tool that identifies the impediments to high impact female entrepreneurship and introduces actionable steps that can be taken to...more

Initiatives that support strengthened capacity and skills for women in business: 

AVPN is a unique funders network headquartered in Singapore that seeks to increase the flow of financial, human and intellectual capital to the social sector across the Asia Pacific region. We promote venture philanthropy in the broader philanthropic and social...more

SMEInfo is a one stop portal providing SMEs with information on business development. This includes information on finance, advisory services, training, networking opportunities, and other development opportunities provided by the government and private sector. Various...more

UMEC, under the University of Malaysia’s office of the Vice-Chancellor, promotes an entrepreneurial culture and entrepreneurial development among university...more

Qualcomm Wireless Reach Initiative, the Cherie Blair Foundation for Women, the Foundation for Women’s Education and Vocational Training, and Maxis Berhad joined to create a business mentoring program for women in Malaysia with the goal of building women’s business skills...more

Initiatives that support women’s leadership, voice and agency: 

The Global Women Entrepreneur Leaders (GWEL) Scorecard, sponsored by Dell Inc. and produced by ACG Inc., is a new data driven diagnostic tool that identifies the impediments to high impact female entrepreneurship and introduces actionable steps that can be taken to...more

Initiatives that support women and innovation and technology: 

Launched in 2008, Gorgeous Geeks is a nonprofit organization with the mission to “empower women using technology” and the tagline “Putting lipstick on technology.” The organization supports learning, sharing, and mentoring for businesswomen as well as for girls. Primary...more

The government of Malaysia plays a strong role in its economy’s economic development. Related to entrepreneurship, the government has created programs in cooperation with ministries and agencies to support entrepreneurs with a number specifically targeted toward women entrepreneurs. Recent efforts were motivated by the Fourth Thrust of the National Key Result Area, which aimed to support 4,000 women entrepreneurs by 2012 and the 10th Malaysia Plan, which aimed to increase women’s labor force participation to 55 percent in 2015 (from 44 percent in 2013). Likewise, women are incorporated into the Economic Transformation Program which is part of the government’s Strategic Reform Initiative on Human Capital Development. This program lays out strategies to support women in various stages of their career.

The government’s efforts to advance women entrepreneurs are particularly notable in regards to supporting women exporters, for example through the Malaysia External Trade Development Corporation’s “Women in Export Directory” (detailed below). Government efforts also focus on encouraging businesses to migrate their businesses online. Currently only 15 percent of Malaysia’s businesses are online.

Efforts to support women entrepreneurs also extend to its efforts to hold high-level events which highlight women’s participation in the economy as a priority area. For example, Malaysia hosted the Global Summit of Women in 2013 with the theme of “Women: Creating New Economies.” The summit brought together over 1,000 high-level delegates from 70 countries and received strong support from government officials throughout. Further, through the Ministry of Entrepreneur and Co-operative Development, which was dissolved in 2009, the government partnered with UNDP and the Malay Chamber of Commerce to run a skills-training program for low-income women; this program built awareness of available options for small and micro loans. This included a communications campaign on microfinance as well as a six-month training program for a group of women running food businesses in two of the most impoverished states in Malaysia: Kelantan and Terengganu.

Overall, the government’s support for women entrepreneurs is increasing. In 2014, the government released Guideline for New SME Definition, providing more firms with opportunities to access SME support services.

The government also runs programs more generally targeted toward helping entrepreneurs. These include : Young Entrepreneur Program, IPTA Entrepreneur Development Program, Graduate Enterprise Development Program, Mentor Program, Basic Training in Business, Basic Entrepreneurial Skills for Graduates, Basic Training in Franchising for Would-Be Franchisers, as well as more applied training programs for specific industries. Access to finance for entrepreneurs is supported through various government funding packages such as the High-Technology Venture Capital Fund and the Small Enterprises Guarantee Scheme. Government ministries also run shorter term workshops including in marketing and business planning.

Services that support women’s access to capital and assets: 

SME Corp. Malaysia was founded in 2009, having the previous names of Small and Medium Industries Development Corporation (established 1996) followed by the National SME Development Council (established 2004). The mission of SME Corp. is to “promote the development of...more

Services that support women’s access to markets: 

MATRADE is the national trade promotion agency of Malaysia, whose mission is to promote Malaysia’s export industry. MATRADE’s objectives include: building the profile of Malaysian exporters in foreign markets; providing trade and market information to support Malaysian...more

Services that support strengthened capacity and skills for women in business: 

Established in 1956, MITI aims to promote Malaysia’s global competitiveness in trade and increase industrial activities in order to build economic growth. MITI runs the National Institute of...more

MWFCD was established in 2001 and has six agencies under its administration including the Department of Women Development. Its mission is to integrate women’s concerns into society and to mainstream women’s perspectives into national development. MWFCD’s five chief...more

Founded by the Ministry of Rural and Regional Development, DUID was established in 1998 to support rural entrepreneurs. DUID’s objectives are to: integrate rural industries across the economy; establish a network of rural industry entrepreneurs; provide training in...more

Services that support women’s leadership, voice and agency: 

This Ministry was established in 2001 and has four agencies under its administration including the Women Development Department (JPW). Its mission is to integrate women’s concerns into society and mainstream women’s perspectives into national development. KPWK’s five...more

Services that support women and innovation and technology: 

MDeC was incorporated in 1996 to oversee the MSC Malaysia and to advise the Malaysian government on policy for multimedia operations. MSC Malaysia is a government-supported ICT initiative that aims to develop the local ICT...more