Small and Medium Enterprises Bank Bhd (SME Bank) will issue a RM3 billion government- guaranteed Islamic medium-term notes programme (IMTN) with a tenure of up to 20 years for its Shariah- compliant working capital requirements.
Its managing director (MD) Datuk Mohd Radzif Mohd Yunus said the first issuance of the IMTN programme would employ the wakalah structure, an investment structure that was widely accepted in the Gulf Cooperation Council (GCC) region.
The bank, which is a financial and development institution for SMEs, has appointed AmInvestment Bank Bhd, Kuwait Finance House (M) Bhd and Maybank Investment Bank Bhd as the joint lead arrangers and joint lead managers for the sukuk.
“The sukuk programme will help to revamp our business model to support growth and empower the SME ecosystem through our network and provide additional funds to assist more SMEs,” he said at the signing ceremony of the sukuk issuance in Kuala Lumpur last Friday.
With this, Mohd Radzif said that the issuance is part of the bank’s new business model, which focuses on growth sustainability.
“The bond will bring our total financing assets to more than RM10 billion after three years.
Currently, it’s at RM7.9 billion. The first tranche involves RM500 million for a tenure of seven to 10 years, while the second tranche will probably be issued by year-end or early next year,” said Mohd Radzif.
In line with the other recent government-guaranteed issuances, Mohd Radzif said that income tax payable by investors on the periodic distributions of the bank’s sukuk would be remitted in full.
Also present at the event was SME Bank chairman Datuk Gumuri Hussain.
“In 2011, SME Bank approved RM1.7 billion worth of funds to 1,381 customers. In the next few years, we are anticipating an increase in these numbers,” said Gumuri.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah witnessed the signing ceremony. “We are expecting the SMEs industry’s contribution to the nation’s gross domestic product (GDP) to increase to 41% by 2020 from the 32% recorded in 2010.
This increase would not only come from the growth in the number of SMEs but more importantly, in the value of economic activity that the industry has created during the said period,” Ahmad Husni said.
At the same event, SME Bank signed an agreement to set up a RM263 million 1-SME Rationalised Fund with the Ministry of Finance to facilitate and optimise the financing activity and accessibility by target groups.
Under the programme, 18 funds under the supervision of the Ministry of International Trade and Industry were rationalised into five groups managed by SME Bank.
Meanwhile, Ahmad Husni also launched the SME Revitalisation Scheme (SRS), also known as the “2nd Chance Programme”, to assist viable but distressed SMEs secure additional financing for their ongoing business.
The scheme is to facilitate the restructuring and rescheduling of “participating financial institutions” financing and to extend additional financing facilities to viable SMEs with delinquent or impaired financing, subject to a maximum aggregate financing amount of not more than RM5 million, inclusive of new financing under the SRS.