By Wendy Lee
Wednesday, July 12 2000 08:39 PM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,13028736,00.htm

KUALA LUMPUR--The Malaysian government has launched a RM20 million E-commerce Grant to specifically help small and medium industry (SMI) companies kick-start their e-commerce initiatives.

This is aimed at encouraging more participation from such companies in e-commerce activities as the way of doing business in the new economy. The Grant is also aimed at assisting them in dealing with financial and skilled worker constraints in carrying out e-commerce activities, said International Trade and Industry Minister Rafidah Aziz here today.

"About 2,000 companies are expected to benefit from this program which will be implemented on a reimbursable basis," she said.

To be managed by the Small and Medium Industries Development Corporation (SMIDEC), the program will be in the form of a 70 percent grant or RM10,000 per SMI company, whichever is lower, to finance activities such as:

• development of homepage, electronic cataloging and corporate welcome page of SMI companies;
• hosting costs;
• training costs for employees to update electronic catalog.

Rafidah said an e-commerce panel of consultants has been formed under SMIDEC to advise SMI companies on the intricacies of the Grant before the companies register their e-commerce portals.

"Each SMI company can register up to five portals or communities per company. This is because some companies may have many subsidiaries, so there may be the need for more than one portal," she said.

Rafidah was speaking at the launch of MyTradeNet, a new online trade financing service offered by MyBiz Malaysia and BSN Commercial Bank (BSNC).

Ability to execute trade financing online
With the new service, members of MyBiz--an electronic trading business environment for small and medium enterprises (SMEs)--will be able to apply for and execute trade financing online through BSNC.

MyBiz--launched in April last year with 50 registered SMEs--has today built up a community of 330 companies from 43 industry sectors.

"For the first time, trade financing will be available at the point of trade in real-time," MyBiz Malaysia chief executive officer Cheong Yuk Wai said, adding this completely digitizes what has traditionally been a paperwork-laden and time consuming process.

"Current practice requires applications for trade financing to be submitted in person at banks offering such services. MyTradeNet cuts away the time and saves costs in the application process."

Trade financing provided through MyTradeNet would be charged the same transaction costs as that practised under the traditional trade financing and stipulated by Bank Negara (Central Bank). Letters of credit issued by banks today charge 0.1 percent of the credit amount per month for the term of the credit.

"This service is provided to our members at no extra cost as we want to provide the convenience to them as well as to encourage more SMEs to move into online trading. Our focus now is to generate more revenue through online trading," Cheong said. He declined to disclose any revenue figures.

BSNC chief executive Nik Mohd Amin Nik Abdul Majid said in future, if the volume of online trade financing were high enough, it was likely the transaction cost would be reduced to below the present 0.1 percent.

He claimed the online trade financing facility makes BSNC the second bank to offer Internet banking after Maybank (with its Maybank2u service) but the first bank to play in the business-to-business (B2B) Internet banking space.

To ensure secure transactions and transfer of information, MyTradeNet employs the iVEST security solution developed by Mimos Bhd.