Two Financing Facilities of RM1.2 Billion to help SME

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced that Bank Negara has set up two financing facilities of up to RM1.2 billion to help small and medium enterprises (SMEs) cope with the impact of higher costs due to rising prices. The RM700mil SME Assistance Facility and the SME Modernisation Facility with an allocation of RM500mil would commence on 1 August 2008.

Small and medium enterprises (SMEs) are an important segment of the Malaysian economy accounting for 99.2% of total business establishments, employing 56% of the work force and contributing about 32% of gross domestic product. To ensure that SMEs remain viable, the Government announced measures to assist SMEs to better manage the impact of higher costs on their operations.

SME ASSISTANCE FACILITY (RM700 million) 

Bank Negara Malaysia has established a RM700 million SME Assistance Facility to assist viable SMEs that are facing financial difficulties to manage temporary cashflow problems due to the rising costs.

The Facility is intended to assist viable SMEs to continue operation and to preserve employment. However, the financing facility shall NOT be used to refinance existing credit facilities (inclusive of NPLs and pre-NPLs).

Under this Facility, viable SMEs will be able to obtain financing at 4% per annum from any commercial and Islamic banks, SME Bank, Agro Bank, Bank Rakyat and EXIM Bank, with an 80% guarantee coverage by the CGC and remaining 20% risk borne by the participating financial institutions.

The maximum amount of financing under the Facility is RM1.5 million per SME, with a maximum tenure of 5 years. Application for new financing under the Facility will be open for 2 years, commencing 1 August 2008.

SME MODERNISATION FACILITY (RM500 million)

Bank Negara Malaysia has established a RM500 million to provide financing to SMEs to modernise their operations, in particular to purchase or upgrade machinery and equipment, as well as for energy saving equipment.

Under this Facility, viable SMEs will be able to obtain financing at 4% per annum from any commercial and Islamic banks, SME Bank, Bank Rakyat and Agro Bank, with an 80% guarantee coverage by CGC and remaining 20% risk borne by the participating financial institutions.

The maximum amount of financing under the Facility is RM5 million per SME or up to 95% margin of financing, whichever is lower with a tenure of up to 8 years. Application for new financing under the Facility will be open for 2 years commencing 1 August 2008.

Eligibility Criteria

  1. SMEs that are owned by Malaysians residing in Malaysia (at least 51% shareholding);
  2. SMEs with shareholders funds not exceeding RM3 million;
  3. SMEs that are NOT affiliates or subsidiaries of Government Linked Companies (GLCs) or public listed companies (PLCs);
  4. SMEs facing financial difficulties due to the rising costs
  5. SMEs with at least 3 years in operation.

Application is to be made through all commercial banks, all Islamic banks, SME Bank, Agrobank, Bank Kerjasama Rakyat and EXIM Bank.

For further details, SMEs can approach the participating financial institutions or contact Bank Negara as below :

BNM TELELINK

Jabatan Komunikasi Korporat,  Bank Negara Malaysia,

Jalan Dato’ Onn, 50480 Kuala Lumpur

Tel : 1-300-88-5465    Fax : 03-2174 1515    Email :bnmtelelink@bnm.gov.my

Back to Index of August 2008