JanaNiaga financing allocation for SMEs to reach RM1.2b

by ASILA JALIL / pic by TMR FILE

THE Ministry of Finance and Export-Import Bank of Malaysia Bhd (Exim Bank) launched a digital multi-funder supply chain finance platform — JanaNiaga — to benefit small and medium enterprises (SMEs) that are facing cashflow issues due to long invoice payments periods.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said platforms like JanaNiaga provide a multitude of benefits to the ecosystem and have been widely used by other economies.

“The platform supports long term economic recovery and is in line with the government’s strategy in prioritising automation and digitalisation, as well as the utilisation of new technology to accelerate the transformation towards a high-income nation,” he said in his speech during the virtual launch of the platform yesterday.

JanaNiaga was first announced on Nov 6 last year during the tabling of Budget 2021.

Exim Bank will lead the platform with involvement from other financial institutions in the country. To ensure SMEs can receive immediate assistance, Exim Bank had provided RM300 million to mobilise JanaNiaga.

“The amount is expected to reach RM1.2 billion with additional allocations from financial institutions that will join JanaNiaga in phases.

“With an average invoice duration of 90 days, this amount will contribute a total of RM4.8 billion a year to SMEs cash flow,” he said.

The minister added that JanaNiaga is driven by invoice financing from government-linked companies (GLCs) via a digital portal.

With support from GLCs, SME suppliers will enjoy financing rates as low as 3.5% per annum for a financing margin of 100% which is much lower than financing at regular rates.

Applications for the funding will be made online, allowing each application to be approved within 24 hours.

“In the early stage, JanaNiaga will be implemented with Petronas and Telekom Malaysia. Therefore, I would like to thank Petronas and Telekom for their support in making this platform a success,” he added.

Tengku Zafrul underscored the important roles played by SMEs as they contribute 38.9% to the country’s GDP and provide 7.3 million jobs to the public. SMEs also contribute 17.9% of exports.

“As the unemployment rate dropped to 4.5% in May 2021 from 5.3% in May 2020, the government needs to take necessary actions to support SMEs and maintain their contribution to the country’s economy.

“SMEs’ cashflow is very crucial during the pandemic in ensuring their sustainability. The government has provided various initiatives to assist them including micro credit financing where RM2.9 billion is provided to help SMEs and micro-SMEs,” he said.

He added that as of last month, more than RM12 billion have been approved for 26,000 SMEs via the soft loan funds operated by the central bank.

The funds include Special Relief Facility, Automation and Digitalisation Facility, All-Economic Sector Facility and Agrofood Facility.