RM200m allocation for Bumiputera Supply Chain Financing Programme

Teraju partners SME Bank and Bank Muamalat for the programme focusing on ‘pandemic recovery’ sectors


TERAJU Bumiputera Corp has signed a bilateral cooperation agreement with Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) and Bank Muamalat Malaysia Bhd for RM200 million Bumiputera Supply Chain (BSC) Financing Programme.

Teraju CEO Md Silmi Abd Rahman said all the focus sectors under the programme are “pandemic economy” sectors that possess potential and relevance for Bumiputeras to venture into.

“The funding also covers logistics in the wholesale and retail, and healthcare sectors, where Bumiputera participation is still low. The existing logistics industry contributes 22% to GDP with the participation of 40,000 companies, yet only 5,000 companies or 12.5% are Bumiputera-owned,” he said at the signing ceremony yesterday.

He added that it would be a loss if this competitive field could not be joined by Bumiputeras due to cashflow constraints and so on.

“Therefore, the main focus and aspiration of Teraju as the main coordinator of the Bumiputera empowerment agenda is to increase the involvement of small and medium enterprises (SME) companies through such financing programmes in order to achieve the target of RM15.9 billion Bumiputera gross operating surplus in logistics by 2030,” he said.

The partnership with SME Bank via the BSC Financing Programme in the wholesale and retail sector is a continuation of the Teras fund programme since 2012, which targets to provide financial assistance to Bumiputera SMEs throughout the supply chain for the sector, including manufacturers, wholesalers, distributors, retailers, as well as service providers including logistics.

SME Bank group president and CEO Aria Putera Ismail said as a development financial institution that has been mandated to develop the country’s SME sector, it is important for the bank to ensure the viability and sustainability of SME entrepreneurs to continue operating, especially in these difficult times.

“Collaboration with Teraju since 2012 through financing programmes such as the Teras Financing Scheme, Subordinated Financing Programme and Bumiputera SME Equity Financing has enabled SME Bank to approve a total financing of RM1.03 billion to 215 Bumiputera SME entrepreneurs.

“As for the entrepreneur development programme, SME Bank through the Best Exporters Programme has guided 73 Bumiputera companies and achieved an increase in export revenue of more than RM141 million and 19 exporting companies have been successfully born.”

He said with the collaboration on BSC, SME Bank will continue to offer complete financing facilities to meet the development needs of Bumiputera SMEs.

Meanwhile, Bank Muamalat CEO Khairul Kamarudin said the strategic partnership with Teraju is an additional financing programme other than the ones announced by

Bank Negara Malaysia to assist Bumiputera SMEs, especially in the healthcare sector supply chain which has been affected by the pandemic.

“A total of RM100 million has been allocated by Bank Muamalat for Bumiputera SMEs that are eligible to enjoy working capital financing and asset purchase facilities (excluding real estate) to rehabilitate and revitalise business activities,” he said.

All three collaborators hope that issues as well as challenges and competition in the supply chain faced by Bumiputeras can be reduced.

The financing programme is also seen to increase the capacity of Bumiputera SMEs in providing high-quality products and services, and at least 30 companies are targeted to benefit with the effect of increasing sales or profits by 10% during the programme implementation.

According to a report by the Department of Statistics, the wholesale and retail sector recorded trade sales of RM111.17 billion in January 2021, but this had declined to RM92.2 billion in June 2021 for a contraction of 10.3% due to the pandemic.

Md Silmi said the pandemic has enabled Malaysia to record a growth of 24.9% in medical equipment exports worth RM30 billion in 2020 compared to RM20 billion in 2019.

“Among the main export products are rubber gloves, syringes, apparatus and electronic monitoring equipment.

“Malaysia also has strengths as a health tourism destination in the region whereas in 2019, statistics recorded the arrival of 1.3 million international health tourists with total hospital bills reaching RM1.7 billion.”