SME Modernisation Facility

SME Modernisation Facility

Introduction
SME Modernisation Facility of RM500 million is established by Bank Negara Malaysia (BNM) to assist SMEs in modernizing their operations and reduce cost of production.

Objective
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 .

Features

Eligibility Criteria

  • Businesses classified as SMEs, as defined by the National SME Development Council.
  • SMEs across all economic sectors;
  • SMEs that are owned by Malaysians residing in Malaysia (at least 51% shareholding);
  • SMEs with shareholders funds not exceeding RM3 million;
  • SMEs that are NOT affiliates or subsidiaries of Government Linked Companies (GLCs) or Public Listed Companies (PLCs);
  • SMEs with at least 3 years in operation.

Lending / Financing Rate

  • 4.0% p.a.
  • For Islamic financing, the mark-up price under the Murabahah or Bai’ Bithaman Ajil contract is also fixed at 4.0% per annum

Type of Financing

Term Loan

Purpose of Financing

  • Purchase and/or upgrade their machinery and equipment
  • Purchase of energy-saving equipment
  • Purchase of 2nd hand or reconditioned equipment
  • Shall NOT be used to refinance existing credit facilities or for working capital

Guarantee Cover

CGC will provide an 80% automatic guarantee cover to the financing obtained (including principal and normal interest)

Maximum Loan Amount

Maximum aggregate financing of RM5 million per SME; or 95% margin of financing, whichever is lower
No minimum amount
Tenure

Maximum of 8 years, inclusive of a principal moratorium period of 6 months
Interest must be serviced during moratorium period

Application Dates

Beginning: 1 August 2008
Ending: 31 July 2010

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