CHAPTER 1 INTRODUCTION 1.

0 Background of the study The contributions of SMEs are not very significant to the economy of Malaysian before it gained independence in 1957. Most of the small firms focused on traditional industries such as handicraft, woodcarving, batik and songket production. After independence, Malaysia has experienced strong economic growth, which transformed the economy from commodity-based to manufacturing-based. SMEs have gradually emerging as an engine of growth for the Malaysian economy. The government has proactively created various financing programs and support measures to promote a vibrant SME sector. SMEs are very important in Malaysia, where statistics show that 99.2% of the total businesses establishments in Malaysia are SMEs (Amry, 2009; Ang, 2010). Malaysian SMEs have become the backbone of the country (StarBiz, 2009). Therefore, SMEs in Malaysia continue to remain significant in the countrys economy and this importance is even more significant as Malaysia moves towards realizing the objective of becoming the developed country status by the year 2020 (SMIDEC, 2008). Furthermore, SMEs have been given high priority in Malaysia and has been identified as one of the engines of the economic growth in an effort to drive Malaysia towards knowledge and technology driven by ideas, innovation and talent (Velasco and Cruz, 2001; Klapper et al., 2002; Svejnar, 2002 and Lin, 2008). Besides, the SMEs are experiencing rapid transformation to become more sustainable in order to contribute to the economic growth of Malaysia. In the first quarter of 2010, the Prime Minister of Malaysia, Datuk Seri Najib Tun Razak, announced the

first part of the National Economical Model (NEM) in conjunction with Invest Malaysia 2010 (Krishnan et al., 2010). As quoted in the SME Annual Report, 2007, the Malaysian government is particularly concerned SMEs with as a tool to drive the nations economic growth: We are reliant on growth and the domestic companies, in particular the SMEs to restore and drive the economy. Therefore, it is imperative that our perceptible approach meet with their needs and requirements. This report also acknowledges the crucial development of diverse and competitive SMEs in creating economic resilience and contributing towards achieving the NEM and Vision 2020. In Malaysia, 99.2% of businesses are SMEs, contributing 32% of the nations gross domestic product (New Sunday Times, March 2009), it is clear that present a resilient SMEs sector assumes a significant role in the overall economy of the nation. Under the Ninth Malaysia Plan (9MP: 2006-2010), the government has allocated an extensive funding of RM3.8 billion (2008) and RM11.9 billion (2010) for SMEs in order to improve and develop SMEs. Given that SMEs have been identified as a major growth engine under 9MP, now there needs related to providing SMEs with the necessary management skills and knowledge in order to compete, sustain and succeed in todays challenging business environment (Daisy et al., 2011). Recognizing the important role played by SMEs in the nations economic activities, the government has introduced a number of assistance programs and incentives and they are called government-support programs (GSPs). Over the years, the number of ministries and agencies involved in providing assistance programs to the SMEs sector has increased significantly. In Malaysia, various support agencies are established in both the federal and states governments to
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provide assistance to SMEs. The government offers a variety of assistance programs that are devoted to helping SMEs to overcome their problems and to stimulate their growth and development. There are 15 ministries and more than 60 government institutions or agencies with varying responsibilities, which are offering a variety of programs to promote SMEs development (SME Annual Report, 2008). According to (Abdullah, 1999; Daisy et al, 2011) there are five key areas of governmentsupport programs for SMEs in Malaysia, such as: financial and credit assistance; technical and training assistance; extension and advisory services; marketing and market research; and infrastructure supports. Besides, the areas that are considered important by the government in terms of providing assistance are: management expertise, finance, land/building, facilities, and information about the market and tax deduction (Hashim et al., 2003). The government also formed and led an agency, known as Small and Medium Industries Development Corporation (SMIDEC) which is responsible for coordinating the development of SMEs. Apart from providing advisory services related to the development of the industry, the agency also provides training and development programs for SMEs as well as the public (National SME Development Council, 2006). Other governments support programs include programs on (Bank Negara Malaysia, 2007): Business loans and grants for example Development Financial Institutions (DFIs) and Enterprises Rehabilitation Fund (ERF), Consultancy services for example Business Advisory Centre and Standard Industrial Research Institute of Malaysia (SIRIM), Training and technical assistance for example National Productivity Centre (NPC) and Malaysian Entrepreneurial Development Centre (MEDEC),

Advertising, selling and market research for example MEDEC and NPC, and Infrastructure facilities for example Free Trade Zones and Licensed Manufacturing Warehouse.-027

Furthermore, to further galvanize SMEs in Malaysia, the government has established an SME bank to help entrepreneurs financially as well as the development of various training programs, particularly in the field of entrepreneurship development, marketing and promotion, product development and technology enhancement (Central Bank of Malaysia, 2007). Despite, the initiatives, the SMEs are still facing various levels of challenges in achieving their goals. According to (Habaradas, 2007) among the challenges faced by SMEs particularly in Asian countries are: improving productivity and product or service quality; increasing entrepreneurial activity; encouraging innovation and technological upgrading among local firms; improving utilization of government incentives; developing human capital and encouraging smart partnerships. Today, the future of SMEs in Malaysia is seen as optimistic, with considerable potential for further growth over the next few years and beyond. Additionally, government support, most of the governments in the world is focusing on their support programs for the development of the SME sector, in order to maintain a stable national economy (Butler, 2008).

1.1

Statement of Problem Given the important role of SMEs to the economic development in Malaysia, the

government has provided several business support programs to ensure their competitiveness. The business supports come in forms of financial and non-financial supports. Over the last four decades the programs has used large amounts of money and operated by several government

agencies. Although it has always been argued by economists that government intervention usually leads to market failure, generally speaking in the developing countries including Malaysia the government intervention had some positive impacts on the development of SMEs as the urgent need to overcome the limitations of SMEs. Usually, this condition is supported by the country experienced steady growth that has brought the country to a new economic power in the region.- 003 In Malaysia, although there are no accurate figures published so far, the estimated failure rate for SMEs was 60% (Portal Komuniti KTAK, 2006). In order to stem the increasing number of SMEs failures, the Malaysian government has taken various measures, including the recent establishment of the SME Bank (in October 2005) to meet the financing needs of SMEs. Other support programs include: promoting and increasing the efficiency of production; enhancing quality and productivity through automation and modernization of machinery; encourage SMEs to carry out R&D, product development, and designing activities; and creating a more conducive business environment for SMEs (Central Bank of Malaysia, 2006).-001 The importance of government support for small business success reported in several studies. Sarder et al.(1997) conducted a study of 161 small enterprises in Bangladesh and found that firms receiving support services, such as marketing, management education and training, technical, extension and consultancy, information, and common facilities from the public or private agencies increased the significantly in sales, employment and productivity. -023 According to Yusuf (1995) in his study on 220 small business entrepreneurs in the South Pacific region listed nine factors that will contribute to the success of small businesses; but the most critical factors were good management, access to financing, personal qualities and satisfactory government support. -023In addition, government support, most of the governments

in the world is focusing on their support programs for the development of the SMEs sector, in order to maintain a stable national economy (Butler, 2008).-038 Governments in developing countries play a role in promoting and supporting companies by providing incentives and infrastructure. However, although there are many agencies and institutions established by the Malaysian government to help SMEs, it is still not clear whether these programs are accessible to SMEs and to what extent SMEs using the programs.-022 Furthermore, many do not realize the funds and programs provided by the government, while some believes it is impossible to obtain such assistance, others are just simply ignorant of it.-022 According to Dana (1987) compared with neighboring countries related to these support programs, the article mentions that the literature published by the Malaysian Industrial Development Authority appears to be preoccupied with internal bureaucratic concerns rather than the needs of entrepreneurs. 022 Malaysian government recognizes that about 25 percent of the countrys economic performance was contributed by the SMEs. Thus, the government has put in place many regulatory, legal and financial frameworks conducive to SME start-ups and development under various strategic plans such as Second Industrial Master Plan (1995-2005), Financial Sector Masterplan (2001-2010), Small and Medium Industry Development Plan (20012005) and Eight Malaysia Plan (2001-2005).-022 Although the government has allocated large amounts for financial assistance and provide a variety of programs for SMEs, all this effort is seen as futile as the impact of business activities are not significant. This situation occurs when the assistance program offered through several government or private agencies without the appropriate observations. -034 According to Abdullah, Latif, Bakar, and Nor (2001), ineffective assistance programs is due to: limited number of SMEs receiving various provision of assistance, inefficient allocation of resources,

and programs that focus on developing new enterprises only. -034In addition, the number of SMEs does not know how to apply for assistance, do not have confidence in their proposal, and think that they need someone to get government assistance (Shieh Lee, 1990). Furthermore, several previous studies have addressed that SMEs are still unaware of the availability of management training programs (Hashim, Ahmad, & Hassan, 2007) and financial assistance programs (Hashim, Ahmad, & Zakaria, 2007). Studies by (Daisy et al., 2011) found the financial assistance that has been provided to SMEs, still not effective for business activities and found to be insignificant. Besides, according to Foziah, Aziz and Sudin (2006), to obtain financial support SMEs prefer to deal with commercial bank over the government agencies. In addition to the bureaucracy and the terms and conditions of strict, one good reason is unawareness of SMEs in sevices (Pilgrim and Meier, 1994 cited in Khairudin, et al., 2007, Oc and Tiesdell, 1999: Foziah et al., 2006, Ram and Jones, 1998 cited in Emslie and Bent, 2007, Emslie and Bent, 2007, 2006, Hakimin et al., 2009).-025 According to (Tambunan, 2007) in Indonesia, the lack of government-support programs were due to inappropriate targeting of training, a lack of budget for managing and maintenance, a lack of qualified trainers, often exceeding their skills or machinery available or conversely focusing on skills they had already mastered, and difficulties in matching training to workshop. Besides, evidence from the field of labor economics shows a positive relationship between training and firm productivity. This, however, has tended to focus on large firms, which are understood to provide more training per employee than small firms (Black et al., 1999; Patton et al., 2000).-037 The characteristics of marketing in SMEs are determined by key constraints such as limited resources, in the form of lack of finance; lack of time and lack of good market

information or information sources. SMEs also suffer from a lack of marketing expertise that may be caused to the owner/managers of the limited skills in marketing or the absence of a marketing specialist and SMEs have a limited impact on the market-place because of these characteristics. In describing the nature of SME marketing, major constraints outlined here have resulted in marketing that is simplistic, haphazard, often responsive and reactive to competitor activity (Carson, 1993; Carson, Gilmore, Perry, & Gronhaug, 2001).-012 Despite the fact that there is strong government support, SMEs are still facing difficulties in their business operations. Although, some SMEs have been recognized by the government and private agencies for their achievement and excellent performance, they represent only a small portion of the total number of SMEs in the country.-034 In general, the problems faced by SMEs are due to the internal and external environment, such as lack of capabilities and resources, poor management, low technology, competition, economics, technology, socio-cultural, and international factors (Hashim, 2000). According to Ghosh and Kwan (1996), the problems faced by SMEs in Malaysia are cost, shortage of labor, and competition. Additionally, the economic crisis provides a big challenge to business operation and adds to the difficulty in assessing financial assistance or funding to overcome the shortage of capital in expanding their businesses.-034 In addition, even though the various programs available in the market, government support programs are not popular among SMEs (Jay & Schaper, 2005; Berry & Sweating, 2006; Foziah et al., 2006). One of the good reasons for the scenario is lack of awareness of business assistance provided by the government. Khairudin et al., (2009) in their study found that only 10.1% respondents were aware of the services provided by one of the credit guarantee in Malaysia. It also found that most SMEs are not aware of the existence of credit guarantee

services sponsored by the government in their area. This study has supported the study by (Oc and Tiesdell cited in Emslie and Bent, 2007; Pilgrim and Meier, 1994 cited in Khairudin, et al., 2007, Foziah et al., 2006), which stated that lack of awareness of the existence of business assistance services provided by the government agencies are some of the reasons for the poor take up rate. -025 As the result, the government sponsored programs are not entirely utilized by SMEs and the poor take up rate (Boter and Lundstrom, 2005; Ramsden & Bennet, 2005; Matton, 1999 cited in Devin et al., 2005; Berry and Sweating, 2006). It is recognized that the lack of awareness is one of the factor of poor utilization of government sponsored business assistance. Previous studies have also shown that the low level of awareness has affected the utilization of government sponsored programs in turn unpopular and less favored by SMEs (Berry and Sweating, 2006; Foziah et al., 2006, Lewis et al., 2009). At present, most of the government agencies are physically accessible to the SMEs. Surprisingly, most of them fail to turn at the agencies for advice though, near their places. Government over the years has spent huge sums of money for the provision of business assistance services. In 2007 and 2008, the Malaysia government through various agencies had spent RM4.9 Billions and RM3.0 Billions respectively for various assistance programs. Its programs involve 189 in 2007 and 202 programs in 2008 (SME Annual Report 2008). The assistance services will remain unproductive and wastage of the public funds if this phenomenon continuously occur.-025 Without denying that environmental variables influence the success of SMEs, it is necessary to more closely examine the internal factors that can contribute to the success of the firm. This is because, despite the governments support and assistance provided to SMEs, and the explosion of economic conditions both Malaysia and Australia recently, many small

businesses still fail. -001 Besides, despite the billions of dollars have been allocated to support SMEs through government funding, training, grants, and the provision of consultative services, the failure rate remains high. It is possible that over-reliance on government support, especially financial, may weaken, rather than strengthen, the entrepreneurs ability to manage his/her business and reduce the competitiveness of firms by searching the responsibility for success on external, contextual factors rather than internal, competence variables. -001

1.2

Research Objectives This research is significantly bringing a few objectives to achieve a goal of the study such

as: 1. To study the various dimensions of government-support programs in business growth. 2. To analyze the relationship between government-support programs and business growth. 3. To examine the level of importance among three dimensions of government-support programs namely financial assistance, training assistance and marketing assistance towards business growth. 1.3 Research Questions In this research, the researcher is would like to know a relationship between GSPs and business growth by a few questions:1. To what extend does government-support programs which comprises in being practices by Small Medium Enterprises (SMEs)? 2. Do government-support programs contribute positively to business growth?
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3. Which sub dimensions of government-support programs is most important towards business growth? 1.4 Significant of the study Recognizing the important role played by SMEs in the nations economic activities, the government has introduced a number of assistance programs and incentives and they are called government-support programs (GSPs). Over the years, the number of ministries and agencies involved in providing assistance programs to the SMEs sector has increased significantly. In Malaysia, various support agencies are established in both the federal and states governments to provide assistance to SMEs. The government offers a variety of assistance programs that are devoted to helping SMEs to overcome their problems and to stimulate their growth and development. There are 15 ministries and more than 60 government institutions or agencies with varying responsibilities, which are offering a variety of programs to promote SMEs development (SME Annual Report, 2008). The government, in supporting growth of the businesses has provided substantive types of assistance programs to ensure a stable growth and the survival of SMEs. Facing with a great number of advantages, SMEs are vulnerable to the economic changes. Due to their size and limitations of resources in particular capital, the operations are not efficient and low in productivity. Therefore, SMEs need assistances from various parties from the government and private sector. Furthermore, billion of money was spent under the programs with the aim to support the business growth of SMEs. The provision of the business assistance services reflects the governments commitment to ensure that SMEs are able to compete and remain competitive in the market.-025

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The support programs by the government have established a basis for SMEs to access the resource for supporting their business. The effects of government support to SMEs is paramount important. According to (Berry and Sweating, 2006) previous studies found a positive relationship between the usages of business assistance by SMEs with the growth of the businesses. Besides, Shepherd and Wiklund (2005) argue that a regular contact with government support agencies has resulted favorable influences on the growth of the small business. Business owners frequently seek for business assistance services experienced positive growth compare to other who did not (Berry and Sweating, 2006). In contrast, the current situation in Malaysia show the business assistance services provided by the government is under utilized. It leaves many assistance services unattended.-025 According to Daisy et al., (2011) although the government has allocated large amounts for financial assistance and provide a variety of programs for SMEs, all this effort is seen as futile as the impact of business activities are not significant. This situation occurs when the assistance program offered through several government or private agencies without the appropriate observations. According to Abdullah, Latif, Bakar, and Nor (2001), ineffective assistance programs is due to: limited number of SMEs receiving various provision of assistance, inefficient allocation of resources, and programs that focus on developing new enterprises only. -034 In addition, the number of SMEs does not know how to apply for assistance, do not have confidence in their proposal, and think that they need someone to get government assistance (Shieh Lee, 1990). Furthermore, several previous studies have addressed that SMEs are still unaware of the availability of management training programs (Hashim, Ahmad, & Hassan, 2007) and financial assistance programs (Hashim, Ahmad, & Zakaria, 2007).

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Moreover, some SMEs have been recognized by the government and private agencies for their achievement and excellent performance, they represent only a small portion of the total number of SMEs in the country (Daisy et al., 2011).-034 In general, the problems faced by SMEs are due to the internal and external environment, such as lack of capabilities and resources, poor management, low technology, competition, economics, technology, socio-cultural, and international factors (Hashim, 2000). According to Ghosh and Kwan (1996), the problems faced by SMEs in Malaysia are cost, shortage of labor, and competition. Additionally, the economic crisis provides a big challenge to business operation and adds to the difficulty in assessing financial assistance or funding to overcome the shortage of capital in expanding their businesses.-034 Limited studies focus on assistance to the SME sector (Grabowski et al., 2003; Borozan et al., 2005; Mazurek-Kucharska et al., 2008).-029 Therefore, this research provides some insight into the SMEs support agencies in order to exploit their potential and thereby to increase the effectiveness of the relevant Government-Support Programs. For policy makers and ministries, the results can be used as the reference in formulating policies or support programs to help SMEs gain better access to global markets, technology and finance as well as to improve their management capabilities. 1.5 Key Concept This section provides the operational definition for the purpose of clarification of key terms as contained in and related to the title of the thesis that will be used throughout the thesis. Detailed discussions on these concepts are presented in the following chapter (Chapter 2).

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1.5.1

Small and Medium-Sized Enterprises (SMEs) According to the SME Corporation (formerly known as SMIDEC), SMEs in Malaysia

fall into two broad categories, manufacturing and services. Manufacturing-related services and agro-based industries - have either fewer than 150 full-time employees; or an annual sales turnover of less than RM25 million. The services are primary agriculture and information and communication technology (ICT), which have either fewer than 50 full-time employees; or an annual sales turnover of less than RM5 million (http://www.smecorp.gov.my/v4/node/14).

1.5.2

Government-Support Programs (GSPs) Governments in western countries pay more attention to public policy on Small and

Medium-sized Enterprises (SMEs) and provide them with various services (Organization for Economic Cooperation and Development, 1997, 1998). It is because they have the potential to grow and contribute to social wealth through the creation of new businesses and jobs (Gavron, Cowling, Hltham and Westall, 1998; Story, 1994; Phillips and Kirchhoff, 1989).-040 Malaysia is not an exception. According to (Abdullah, 1999; Daisy et al., 2011) there are five key areas of governmentsupport programs for SMEs in Malaysia, such as: financial and credit assistance; technical and training assistance; extension and advisory services; marketing and market research; and infrastructure supports. In addition, the areas that are considered important by the government in terms of providing assistance are: management expertise, finance, land/building, facilities, and information about the market and tax deduction (Hashim et al., 2003).

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1.5.3

Government-Support Programs in Financial Assistance Since the 1970s, the Government has established a number of specialized financial

institutions and has adopted policy measures to provide cheap credit available and accessible to SMEs. Various authors explain firm growth and entry into international markets through access to financing (Hashi, 2001; Morrison et al., 2003; Brown, et al., 2005), since access to credit to make working capital for business activities and the purchase of equipment, external consulting, and training possible. Beck and Demirguc-Kunt (2006) show that financing to facilitate entry into the market and explains the significant growth for the business development. Public and private financial institutions are the main funding source, and when handled properly they alleviate resource constraints on subsistence businesses, which can improve the access to external financing. In addition, inadequate operation by credit institutions has caused a lot of microenterprises to obtain financing through the informal credit market, in the form of loans from family members, community members, and loan sharks (Carpenter and Petersen, 2002; Carey and Flynn, 2005;). Microenterprises have reliable access to financing institutions of higher sales growth of businesses that rely on soft credit (Becchetti and Trovato, 2002).-008

1.5.4

Government-Support Programs in Training Assistance According Cole (2002), in his book Personnel and Human Resource Management,

training is a learning activity directed towards the acquisition of specific knowledge and skills for the purpose of an occupation or task. The focus of training is the job or task for example, the need to have efficiency and safety in the operation of particular machines or equipment, or the need for an effective sales force to mention but a few.-015

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Thus, Cole (2002) defined training as a set of activities in which practitioners, managers and will be managers are assisted to improve their individual competence and performance as well as the organizational environment, with the ultimate goal of improving the organization standard and widening profit margin. -016 Consequently, this has caused the Malaysian government to intervene and encourage the training and development of manpower. Some of the measures taken by the Malaysian government are set up industrial training institutes that offer skills training program at basic, intermediate and advanced levels for job entry level (Intan et al., 2011).

1.5.5

Government-Support Programs in Marketing Assistance In Malaysia, there are several agencies which provide marketing consultancy services at

general management principles. These include MEDEC, NPC, the DFIs and SmallMedium Industries Development Corporation (SMIDEC). The NPC presently provides a range of shortcourses, particularly in the area of marketing, sales promotion and exporting. Moreover NPC and MEDEC are also providing self-instruction kits containing training videos and audio tapes on marketing along with texts, samples, illustrations, case studies and other materials to be distributed to SMEs. SMEs are also being assisted to find markets for their products by several other government agencies. For instance, the Federal Agricultural Marketing Authority (FAMA) and MARDI. Furthermore, marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is meeting need profitability (Kotler et al., 2009). The American Marketing association offers the following formal definition:

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Marketing is an organizational function and a set of process for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (Peter, 1995; Kotler et al., 2009).

1.5.6

Business Growth Business growth is defined as a dynamic change over time; it can achieve business goals

and success (Weinzimmer, Nystrom and Freeman, 1998; Hynes, 2010). Business growth can be represented by the growth rates of sales, profit, market share (Bartb, 2003), efficiency (Davies and Walters, 2004).-032 In addition, Akerley (2007) defined business growth as revenue and profitability of businesses.-033 According to (Gartner, 1990; Timmons and Spinelli, 2003)business growth is often used as the dependent variable in entrepreneurship research.-030

1.5.7

Resource-based View (RBV) According to Barney (1991) the resource-based view suggests that valuable, rare,

imperfectly imitable and non-substitutable help firms developing sustainable competitive advantages. Valuable resources are the resources that utilize opportunities and minimize uncertainties and risks in the firms environment (Barney, 1991). Rare resources are not owned by a large number of firms because a resource possessed by various firms cannot be considered a source of competitive advantage. Imperfectly imitable resources are difficult for other firms to copy, reproduce or obtain. Non-substitutable resources cannot have any strategically equivalent substitutes for them. Resources that are substitutable will not deliver sustainable competitive advantage to the firm possessing them. Sustainable competitive advantages are necessary for firms to grow in the long term (Barney, 1986; Conner, 1991; Wernerfelt, 1984).

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1.6

Layout of Thesis

The thesis comprises five chapters. Chapter One has briefly provided an overview of the study. It highlighted some issues that are considered important in order to give a clear insight and picture to the readers. The statement of problem, underlying research objectives, research questions, significance of study and list of the key concepts have been briefly presented throughout this chapter. Chapter Two provides the literature review pertaining to the issues related to the dimensions of GSPs namely financial assistance, training assistance, marketing assistance towards business growth and others related issues. Chapter Three is devoted to the description of the methodology used in this research. The development and the proposed methodology for the research are discussed, descriptive its suitability to address and achieve the aims and objectives of the research. The basis of the selection of the most suitable methodological approach for the research is discussed, taking into consideration the significant and relevant factors that have an impact on the type of research method used. Chapter Four presents the findings and analysis of the quantitative survey questionnaire, which is among the primary data for the research. Relevant and related research questions are posed in the questionnaire. The results are based on the analysis of feedback from respondents using the Statistical Package for the Social Science (SPSS) software. Chapter five completes the thesis with a summary of the research, important conclusions and general recommendations. It defines the extent to which the research objectives have been achieved, the limitations of the present research, and gives recommendations for future research.

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1.7

Conclusions This chapter introduced the background of the study, including the issues related to the

dimensions of GSPs namely financial assistance, training assistance and marketing assistance. The importance of government support for small business success reported in several studies. Sarder et al.(1997) conducted a study of 161 small enterprises in Bangladesh and found that firms receiving support services, such as marketing, management education and training, technical, extension and consultancy, information, and common facilities from the public or private agencies increased the significantly in sales, employment and productivity. -023

According to Yusuf (1995) in his study on 220 small business entrepreneurs in the South Pacific region listed nine factors that will contribute to the success of small businesses; but the most critical factors were good management, access to financing, personal qualities and satisfactory government support. -023 In conclusions, government support, most of the governments in the world is focusing on their support programs for the development of the SMEs sector, in order to maintain a stable national economy (Butler, 2008).-038 Therefore, this research aims to identify the contribution of GSPs towards business growth among SMEs in Melaka. Firstly, the researcher to study the various dimensions of GSPs in business growth. Secondly, to analyze the relationship between GSPs and business growth. Thirdly, to examine the level of importance among three dimensions of GSPs namely financial, training and marketing assistance towards business growth.

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