KUALA TERENGGANU, Jan 7 (Bernama) -- SME Corporation Malaysia (SME Corp) Terengganu has allocated financing of RM3 million this year for 25 companies as grants under the Bumiputera Enterprise Enhancement Programme (BEEP).

Director Muhammad Ibrahim said the BEEP grant focus is on high impact industries based on green and pharmaceutical technologies.

"In collaboration with more than 20 government departments and agencies related to entrepreneurship, we will be offering grants to companies that can benefit from the scheme and expand their business in the domestic and overseas markets," he told Bernama.

As of last year, eight companies in Terengganu received grants amounting to RM500,000 under BEEP.

"Financing will be focused on companies with two-star status, especially businesses owned by youth and women entrepreneurs," Muhammad said.

He said in Terengganu, entrepreneurs were rated as two, three, four and five stars, under the SME Competitive Rating for Enhancement (SCORE) system established by SME Corp.

He said currently, there were 32 SME companies already rated as four- star through SCORE.

"At the same time, there are 431 companies with three-star status and SME Corp is targeting to increase their performance to four-star status in three to four years' time," he added.

With the 98.5 per cent contribution to business activities in the country, SMEs, he said, can be regarded as the backbone of the industrial sector.

According to Muhammad, the SME sector faced challenges due to lower consumer spending following implementation of the Goods and Services Tax (GST), the slower economic growth and weakening of the ringgit.

"The SME sector, especially in Terengganu, where 80 per cent is still tied to the domestic market, has to rise this year through capacity development and the ASEAN Economic Community (AEC)," he said.

In this respect, he added, the formation of the AEC as a new trading bloc, would expand the market for business and investment.

Muhammad said Terengganu SME contributed 2.1 per cent to the country's gross domestic product and this is still regarded as robust growth in view of the uncertainty in the market.

To face the challenges this year, he advised entrepreneurs to provide high quality products and services, while minimising costs.

He also encouraged online trading to expand business at the global level.