Gearing up to play a pivotal role in thrusting more entrepreneurs, as an investment holding company owned by Minister of Finance Incorporated (MOF Inc.), Perbadanan Nasional Berhad (Pernas) appears to be the driving force that is mandated to develop the franchise industry since 2004.
Bound by its strong rich history, Pernas has witnessed significant changes in the corporate landscape and being an agency under MEDAC, it will continue to reiterate its importance in driving the franchise sector in the country as it emphasises its focus on building an entrepreneurial community with the franchise in mind.
Understanding that in keeping the organization relevant in the industry and in line with its goal to produce more entrepreneurs in the franchise industry and develop more local brands towards franchising, the decision to rebrand the company in a big way was imperative.
The rebranding itself involved changing its acronym and logo, to strengthen its position as Malaysia’s franchise champion.
With Chief Executive Officer, Mohd Hilaluddin bin Abd Shukor at the helm, he believes that the Pernas rebranded signals the move to enable the public to differentiate Pernas distinctively and maintain the mandate given as the agency responsible for the development of the country’s franchise industry.
The first move in this new direction was to conceive a new corporate identity.
“First we have a new corporate logo which depicts the sun as the new beginning with the cradle visual as symbolic of how we nurture business growth from the start-up to success.
“The circle featuring a spectrum of orange colour symbolises the sun that portrays a bright future as well as progressive relationship and growth,” Hilaluddin told Business Today in an exclusive interview.
A modern and fresh new logo and colours that symbolises the support to its effort in empowering the growth of entrepreneurs.
The rebranding exercise was not only to introduce the new identity as Pernas but also a strategic one that allows the company to position itself as Malaysia’s franchise champion that underscores its role in providing franchise opportunities to entrepreneurs while growing the nation’s entrepreneurial community.
“The change from PNS to Pernas signals our move to become the nation’s distinguished franchise champion. To reflect this change, we now have a new brand promise to fulfil, “said Hilaluddin.
Hilaluddin said that it plays a pivotal role in not just limiting the existing franchise brands but also in guiding micro-businesses and SMEs with the potential to grow them into becoming franchisees.
ENHANCED QUALITY OF SERVICES
The rebranding exercise also entails other aspects such as the quality of the services Pernas offers to its customers and entrepreneurs with the commitment to produce more entrepreneurs, especially in the franchise business in line with the National Entrepreneurship Policy (NEP) 2030.
Through its five-year plan, Pernas aims to approve 5,000 financing funds for entrepreneurs to grow its franchise portfolio by 400% from RM178 million to RM700 million; create 18,000 new job opportunities, and contribute RM4.4 billion to the nation’s Gross Domestic Product (GDP).
To achieve this, the CEO said Pernas will create a more effective franchise ecosystem with a comprehensive value chain supported by digital technology as well as empower the socio-economic development of Bumiputera through entrepreneurship.
Since 2004, Pernas has disbursed a total of RM1.3 billion in funding to more than 5,500 entrepreneurs and created more than 35,000 jobs.
BEATING THE PANDEMIC
The pandemic has provided fresh challenges for Pernas and it had to overcome these challenges through various assistance and funding schemes, including the introduction of the “RECURVE” program that offers additional funds to entrepreneurs to help revive their businesses.
“A total of RM20 million is allocated for this purpose which will benefit more than 350 of Pernas existing franchise entrepreneurs; the offering of a moratorium to eligible borrowers for all financing for six months from June to November 2021; rescheduling of loans for all eligible financing after the end of the moratorium period.
The assistance is offered to borrowers with a good repayment record and for this year, a total of 337 entrepreneurs had their moratorium application approved which amounts to RM9.32 million, the CEO said.
Pernas also organised several webinar series which include collaboration with the Ministry of Entrepreneur Development and Cooperatives (MEDAC) to provide information on Pernas services and products including providing knowledge and guidance on franchise business as well as sharing sessions by industry experts on entrepreneurship strategies and plans to prepare entrepreneurs in facing the new norm.
On how optimistic Pernas is in achieving its laid-out goals in the coming years, Hilaluddin said that the franchise industry grew at a commendable rate where its annual sales value recorded an increase of 17.3% of RM13.3 billion compared to RM11 billion in 2019.
In fact, he said there are now 1,090 registered franchise companies and from that, a total of 68 local franchise companies have successfully entered the international market in 70 countries.
“This proves that the country’s franchise industry has gained a place among entrepreneurs as one of the viable branches of entrepreneurship,” he said.
Based on this positive scenario, Pernas will continue to be focused and committed to produce more franchise entrepreneurs and develop more local franchise brands through its financing, guidance, and advisory services offerings.
Pernas disbursed the following funding amount, RM22.8 million in 2020 to 94 entrepreneurs; a total of RM33.7 million to 202 entrepreneurs in 2019; and for this year up until June 2021, Pernas has funded a total of RM16.3 million to 55 entrepreneurs.
To improve the franchise ecosystem in the country for it to achieve a higher position, and in an effort to create a more effective franchise ecosystem and achieve a higher level, Pernas has established strategic engagements and collaborations with various government agencies and the private sector.
Collaboration such as these plays an integral role in Pernas initiatives, especially when developing and strengthening the business system of existing and potential entrepreneurs, including the transition from being a skilled workforce to franchise entrepreneurs.
He said that to support the creation of 18,000 job opportunities initiatives in the next five years, Pernas has launched two new projects early this year. The launched projects by Pernas are also in line with the government’s intention to produce more entrepreneurs, namely:
Be Your Own Boss (BYOB) Project offers two programs targeted at women and youth known as the Successful Women Entrepreneurship Engagement Talent (SWEET) program for women and the Young Entrepreneurship Engagement Talent (YOUNITY) program for youth.
In addition, Hilaluddin said that Pernas aims to produce 1,000 franchisees and pre-franchisees under these programs where participants are offered comprehensive guidance and training, funding as well as access to current markets.
He said that since they were first introduced, more than 614 participants comprising youth and women have registered as BYOB participants; and from that number, 417 participants have completed their training and 396 of them are undergoing a business matching process.
The other project, he said was the Xcelerator Project where Pernas actively helps existing entrepreneurs to fast-track their business towards the franchise. i.e within a year.
He said that the projects were initiated with the aim to help reduce the rising unemployment rate in Malaysia especially when Malaysians are facing job losses during the Covid-19 outbreak, and help cultivate public interests to make entrepreneurship a top career choice.
ROLE OF SMEs
The small and medium enterprises (SMEs) including micro-enterprises have been integral to Malaysia’s economy as they play a significant role in creating employment and account for being the major contributor to the nation’s Gross Domestic Product (GDP).
In 2020, SMEs contribute 38.2% of the nation’s GDP which is RM512.8 billion from RM1,343.9 billion.
Pernas has offered several initiatives to assist SME entrepreneurs through
Business In Transformation (BIT) Program which identifies and in turn helps develop small businesses towards franchising; provides funding support, advisory services, and consultancy to participants; and to create more affordable franchise businesses that enable more potential entrepreneurs to venture into the franchise business.
He said to date, a total of 142 companies from various sectors such as food & beverage, retail, services and education have registered in the BIT program.
He said that SME businesses play a big role in contributing to the national economy. Based on this initiative, Pernas is one of the agencies that will help MEDAC to achieve its aspiration to produce 100 millionaires every year among SME entrepreneurs.
In addition, the Pybli; provide online services for buyers and sellers to conduct their business transactions; and this infrastructure was developed to provide a digital marketplace designed specifically for franchise businesses, BIT entrepreneurs under Pernas and SMEs.
He said to date there are 442 small entrepreneurs registered under Pybli where Pybli’s existence is seen to be able to further diversify the choice of platforms and services for entrepreneurs to market their products and services digitally.
MEDAC and Pernas also offer entrepreneurs the opportunity to participate in the Jom Ubah Minda Peniaga (JUMP) Program with the objective to provide digital training and exposure to micro and SMEs entrepreneurs and reduce operating costs, acquire new customer targets as well as optimize SME resources.
Among other initiatives is the Franchise Institute with the aim to provide training and consulting services in various fields and not just limited to the franchise and this is not limited to only SME entrepreneurs, in fact, all entrepreneurs and entrepreneurs to-be can go to the Franchise Institute to gain knowledge and receive guidance on entrepreneurship and business.
On how to heighten the awareness on affordable franchises, the CEO said that the public has the preconceived sceptical view that franchise businesses are expensive.
“There are many who still think that franchise brands are limited to big brand names such as McDonald’s, Marrybrown and so on (super brand) but the truth of the matter is, franchise businesses are not only vast but also there are plenty of affordable brands under franchise business that can be explored.
He said that when talking about the franchise business, society perceives it as a business that requires high capital.
Today, prospective entrepreneurs who want to venture into business, particularly in the field of franchise, do not have to worry about the big business packages because you get to choose franchise business packages that are more affordable.
“For example, the MD Putu Bambu World brand. With their package starting from RM7,000 to RM70,000, you can start a franchise business,” he said.
He said in fact, the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) has implemented the Micro Franchise and Affordable Franchise Development Program as follows:
Through the presentation of Budget 2021 on Nov 6, 2020, the Government has allocated a total of RM5 million to KPDNHEP to implement and carry out the Micro Franchise and Affordable Franchise Development Program successfully; This program will be one of the main programs in an effort to attract the involvement of more people, especially the B40 and M40, to venture into the franchise business.
He said that KPDNHEP as the national franchise industry development leader has announced the implementation of this program focusing on granting grants to develop more affordable franchise packages worth RM100,000 and below as well as micro franchise packages worth RM50,000 and below to increase the number of franchise entrepreneurs (franchisees) from the B40 group and M40 and they are not limited to the F&B sector only.
Hilaluddin said that the objectives of the implementation of this development program are to provide job creation to the M40 and B40 groups and expand the franchise business to target groups especially those affected by the Covid-19 pandemic.
In the past, the franchise industry was dominated by the food and beverage sector, today the franchise business sectors that have gained more demand and has the potential to thrive are Beauty and health; fashion and accessories; Services and maintenance; Convenience stores and supermarkets; IT and telecommunications; Learning and childcare centres among others.