Govt to continue guarantee schemes for SMEs

Govt agencies have so far provided a total of RM23.2b guarantees for companies in need


THE government will continue to provide guarantee schemes for the small and medium enterprises (SMEs), Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said.

Tengku Zafrul highlighted that government-linked company Credit Guarantee Corp Malaysia Bhd (CGC) has so far offered a total of RM13.2 billion in guarantees for SMEs from April 2020 to June 2022, while Minister of Finance Inc’s wholly owned Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) has provided an additional guarantee limit of RM10 billion to provide guarantees for scheduled and restructured loans for companies in need, specifically for the Bumiputera businesses.

“Over the past few years, these funds have helped many SMEs gain access to financing facilities, through financial institutions in Malaysia.

“With appropriations from the government in the form of guarantees and funds, banks could provide more financing facilities at competitive rates, and this would certainly help them to rise again post-emergency,” Tengku Zafrul said in his speech during the signing ceremony between CGC, SJPP and CIMB Group Holdings Bhd’s subsidiaries CIMB Bank Bhd and CIMB Islamic Bank Bhd.

CGC, SJPP and CIMB’s subsidiaries have agreed to commit RM30 billion in financing to support and spur the recovery of SMEs by 2024.

Among the financings are CIMB-CGC Financing Programme, Low Carbon Transition Facility (LCTF) and Pemulih Government Guarantee Scheme (PGGS).

CIMB group CEO Datuk Abdul Rahman Ahmad said the new RM30 billion commitment is expected to further strengthen CIMB’s efforts to help SMEs over the next two years.

Previously, CIMB had successfully disbursed RM15 billion in financing to support SMEs between 2019 to 2020.

The CIMB-CGC Financing Programme is available for the purchase and refinancing of property under CIMB’s SME Banking, while the LCTF is to encourage and empower businesses to adopt low carbon and sustainable practices for business resilience and they will be offered collateral-free financing of up to RM10 million with an affordable repayment period of up to ten years at a low-interest rate of up to 5% per annum.

Meanwhile, the PGGS is a government guarantee scheme managed by SJPP, which provides up to 80% guarantee cover for new banking financing facilities or additional working capital of up to RM20 million, with a maximum loan tenure of ten years.