CAPITAL.MY

Alternative Funding Sources for Businesses

BNM RM2 billion SME Assistance Guarantee Scheme

BNM RM2 billion SME Assistance Guarantee Scheme

Bank Negara Malaysia wishes to announce the establishment of a RM2 billion SME Assistance Guarantee Scheme to ensure that viable SMEs adversely impacted by the current economic slowdown continue to have access to adequate financing. With the guarantee cover, it is envisaged that access to financing to viable SMEs will be enhanced and at a lower cost.

Eligible SMEs can obtain financing of up to RM500,000 per SME under this Scheme for tenures of up to 5 years. The Credit Guarantee Corporation Berhad (CGC) will provide an 80% guarantee cover for financing approved under this Scheme. The guarantee cover will be provided free of charge and the cost of the guarantee will be fully borne by Bank Negara Malaysia. Financing obtained under this Scheme is for new financing only and must be used for business purposes, such as working capital, project financing and capital expenditure.

This Scheme can be accessed at any commercial and Islamic bank, SME Bank, Agrobank, Bank Rakyat, EXIM Bank and Bank Simpanan Nasional. Participating financial institutions will determine the lending or financing rate to be charged and applications are subject to the normal credit approval process of the participating financial institutions. Applications for this Scheme will be open from 3rd February 2009 till 31st December 2009 or when the financing limit of RM2 billion has been fully utilised.

KEY FEATURES of the SME Assistance Guarantee Scheme (SME AGS)

Guarantee cover provided by CGC
80% guarantee cover on principal and normal interest.
Risk on the remaining 20% will be borne by the participating financial institutions

Guarantee fee
No charges

Interest/financing rate charged
Determined by the participating financial institutions

Source of funds
Participating financial institutions

Purpose of financing
Working capital, Project financing, Capital expenditure
Shall NOT be used to refinance existing credit facilities

Eligibility criteria
SMEs with shareholders funds below RM3 million; and
SMEs that are not affiliates and subsidiaries of GLCs and PLCs; and
SMEs owned by Malaysians (at least 51% shareholding) residing in MalaysiaSMEs adversely impacted by the current economic slowdown.

Maximum financing tenure
5 years.
Aggregate financing of RM500,000 per SME.

Application deadline
Open from 3 rd February till 31 December 2009 or upon approval of financing up to RM2 billion, whichever is earlier. The continuation of the Scheme thereafter will be subject to review.

Participating financial institutions

  • All commercial banks;
  • All Islamic Banks;
  • Agrobank;
  • Bank Rakyat;
  • SME Bank;
  • EXIM Bank; and
  • Bank Simpanan Nasional.