Flexi Guarantee Scheme (CGC)

Objective

Flexi Guarantee Scheme (FGS) provides guarantee for loans granted under Fund for Small and Medium Industries 2 (FSMI 2), New Entrepreneur Fund 2 (NEF 2) and Rehabilitation Fund for Small Businesses (RFSB).

The funds are designed to facilitate greater access to credit for viable Malaysian Small and Medium Industries (SMIs). A total of RM250 million is allocated for the NEF2, RM400 million for FSMI2 and RM800 million under RFSB.

Main Characteristics
Among the main characteristics of the FGS are:

  • Guarantee cover ranging from 30% – 80% as required by participating financial institutions.
  • Annual guarantee fee, calculated based on the guarantee cover issued and payable in advance. Fees will be borne by the participating financial institutions.
  • Unsecured Portion :-Between 0.8% to 2.15% per annum.
  • Secured Portion :-Between 0.5% to 1.85% per annum.

Application Procedures
The loan application is made through any participating financial institutions. Approval will be subjected to normal vetting procedures and security requirements of the participating financial institutions.

FUND FOR SMALL AND MEDIUM INDUSTRIES (FSMI 2)

Purpose of Financing

  • Expansion of productive capacity
  • Working capital; or both

Financing should not be used for:

  • Purchase of shares
  • Refinancing of existing credit facilities
  • Purchase of land and properties for investment purposes

Eligibility Criteria

  • Shareholders’ funds not exceeding RM2.0 million.
  • Malaysian-owned institutions (at least 51%) incorporated under the Companies Act 1965, the Co-operative Societies Act 1993, the Societies Act 1966, citizens residing in Malaysia and
  • Entrepreneurs registered under the Registrar of Business or any other authoritative bodies.
  • Must fall within the definition of SMEs ( for details, please click here )
  • Franchise businesses can apply under this scheme.

Eligible Sectors : All economic sectors except for money ex-change activity.
Maximum Financing Rate : 4.0% to 6.0% p.a
Maximum Tenure : Up to 5 years
Minimum Funding : RM50,000
Maximum Funding : RM5 million

Participating Financial Institutions (PFIs)

  • All commercial banks
  • All islamic banks
  • SME Bank
  • Malaysian Industrial Development Finance Bhd
  • Bank Pertanian Malaysia
  • Sabah Development Bank Bhd

NEW ENTREPRENEUR FUND 2 (NEF 2)

Purpose of Financing

  • Expansion of productive capacity
  • Working capital; or both

Financing should not be used for:

  • Purchase of shares
  • Refinancing of existing credit facilities

Eligibility

  • Shareholders’ funds not exceeding RM10 million.
  • Wholly-owned Bumiputera institutions incorporated under the Companies Act 1965, the Co-operative Societies Act 1993, the Societies Act 1966, Bumiputera citizens residing in Malaysia and
  • Bumiputera entrepreneurs registered under the Registrar of Business or any other authoritative bodies; or
  • Must fall within the definition of SMEs ( for details, please click here )
  • Small and medium- sized Bumiputera enterprises participating under the vendor development programme of the Ministry of Entrepreneur Development or Ministry of Finance with at least 70%
  • Bumiputera equity and management control.

Eligible Sectors : All economic sectors
Maximum Financing Rate : 4.0% to 6.0% p.a
Maximum Tenure :Up to 5 years
Minimum Funding RM50,000
Maximum Funding RM5 million

Participating Financial Institutions (PFIs)

  • All commercial banks
  • All islamic banks
  • SME Bank
  • Malaysian Industrial Development Finance Bhd
  • Bank Pertanian Malaysia
  • Sabah Development Bank Bhd

REHABILITATION FUND FOR SMALL BUSINESSES (RFSB)

Purpose of Financing
For working capital and business expansion purposes.

Financing should not be used for:
Refinance the existing credit facility. However, borrower may utilise up to 40% of the financing amount approved to refinance and restructure existing NPL.

Eligibility

Small and medium enterprises (SMEs) in all economic sectors that fulfill the following conditions:

  • Malaysian owned (at least 51%) companies and institutions registered under the Companies Act 1965, Registration of Business Act 1956, Societies Act 1966 or the Cooperative Societies Act 1993;
  • Business enterprises with full-time employees not exceeding 150 and annual sales turnover not exceeding RM25 million;
  • Aggregate outstanding NPL of not more than RM3 million with commercial banks, finance companies, Islamic banks, Bank Pembangunan dan Infrastruktur Malaysia Berhad and Bank Industri dan Teknologi Malaysia Berhad;
  • The NPLs must only be for business-related loans (to exclude share financing and loans for personal consumption; and
  • Applicants must have on-going business.

Eligible Sectors : All economic sectors
Maximum Financing Rate : 5.0% p.a
Maximum Tenure : 5 years
Maximum Funding : RM1.5 million

Participating Financial Institutions (PFIs)

  • All commercial banks
  • All finance companies
  • Bank Islam Malaysia Berhad
  • Bank Muamalat Malaysia Berhad
  • Bank Pertanian Malaysia
  • SME Bank
  • Bank Pembangunan dan Infrastruktur Malaysia Bhd
  • Malaysian Industrial Development Finance Bhd
  • Sabah Development Bank Bhd