Bank Negara Malaysia has established a RM2 billion SME Assistance Guarantee Scheme (SAGS) to ensure that viable Small and Medium Enterprises (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, the central bank said in a statement Friday.
Eligible SMEs can obtain financing of up to RM500,000 per SME under this scheme for tenures of up to five years.
The criteria for eligible SMEs are shareholders funds below RM3 million; not affiliates and subsidiaries of government-linked companies and public listed companies and SMEs owned by Malaysians (at least 51 percent shareholding) residing in Malaysia; and SMEs adversely impacted by the current economic slowdown.
The Credit Guarantee Corporation (CGC) will provide an 80 percent guarantee cover on principal and normal interest for financing approved under this scheme, while the remaining risks will be borne by participating financial institutions.
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, said the central bank.
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, BNM said.
Applications for this scheme will be open from February 3 till December 31, this year or when the financing limit of RM2 billion has been fully utilised.
For further details, SMEs can approach the participating financial institutions or contact BNMTELELINK at 1-300-88-5465 or visit the BNM website at www.bnm.gov.my.