Chapter 6 - SME Corporation Malaysia

Chapter 6 - SME Corporation Malaysia

Chapter 6 - SME Corporation Malaysia


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National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1085CHAPTER 1The <strong>Malaysia</strong>n Economy<strong>Chapter</strong> 6: Enhancing Access to Financing88 Diversified Financial Landscape for <strong>SME</strong>sBox Article: Success Stories of the <strong>SME</strong> Assistance Guarantee Scheme 9198 New Programmes and Financial Facilities in 2010Box Article: New Financing Schemes Introduced in 2010 99

CHAPTER 186 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10The <strong>Malaysia</strong>n Economy

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1087CHAPTER 6Enhancing Accessto FinancingAmidst the challenging businessenvironment, early Government interventionhelped to minimise the impact of the globalfinancial crisis on local <strong>SME</strong>s. Viable <strong>SME</strong>scontinued to have access to financingthrough various Government measures,including setting-up of new funds andguarantee schemes and initiatives todiversify avenues of financing. Thesemeasures accelerated the recoveryprocess and thus essentially avoidedan over- adjustment of the economy thatcould have otherwise occurred.Enhancing Access to Financing

CHAPTER 688 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to FinancingIn 2008 and 2009, the Government had undertaken a comprehensiveapproach to assist businesses which include introducing stimulus measuresspecifically for <strong>SME</strong>s amounting to RM15.6 billion or equivalent to 2% of GDPto weather the impact of the global financial crisis. Bulk of the measures wasfocused on enhancing access to financing for <strong>SME</strong>s. As at end-June 2010,80% of the funds have been approved, and 65% of these funds have beendisbursed benefiting about 79,000 <strong>SME</strong>s (end-2009: 53% disbursed to 56,000<strong>SME</strong>s) which helped support the early recovery of the economy.Diversified Financial Landscape for <strong>SME</strong>In addition to the comprehensive financial landscape comprising bankinginstitutions (BIs), development financial institutions (DFIs), venture capitalcompanies, leasing and factoring companies, there are also Government fundsand Bank Negara <strong>Malaysia</strong> (BNM) schemes that <strong>SME</strong>s can avail themselves.During the year, risk sharing mechanisms, such as the guarantee schemeswere also introduced to enhance <strong>SME</strong>s’ access to financing.Chart 6.1Diversified Financial Landscape for <strong>SME</strong>sBanking InstitutionsDevelopment Financial InstitutionsBNM Special Funds and Guarantee SchemesGovernment Funds and SchemesCredit Guarantee Schemes<strong>SME</strong> Credit BureauGovernment Crisis FundsVenture CapitalCompaniesLeasing andFactoringAr-Rahnu andPawn BrokingMicrofinanceInstitutionsBanking Institutions and Development Financial InstitutionsBanking institutions continued to remain as the main source of financing for<strong>SME</strong>s, accounting for 80% of the total financing extended by the various <strong>SME</strong>financiers as at end-2009. In addition, DFIs complement the banks to facilitatethe growth of strategic sectors as identified by the Government.

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1089CHAPTER 6Chart 6.2<strong>SME</strong> Financing Outstanding as at end-2009 (RM billion)BlsDFIsGovernment Fundsand SchemesVenture CapitalLeasing andFactoring1. 2009 and first-half of 2010,financing to some <strong>SME</strong>s wereexcluded from the <strong>SME</strong> financingdata because these companies hadgrown beyond the definition of <strong>SME</strong>s.Without this exclusion, financingoutstanding to <strong>SME</strong>s by financialinstitutions expanded 5.5%year-on-year to RM146.4 billioninvolving 648,236 accounts as atend-2009, and increased further by8% as at end-June 2010.Enhancing Access to FinancingChart 6.3Approval Rate of <strong>SME</strong>s0 20 40 60 80 100 120Source: <strong>SME</strong> <strong>Corporation</strong> <strong>Malaysia</strong>, Bank Negara <strong>Malaysia</strong> and Securities Commission of <strong>Malaysia</strong>During the year, financing to <strong>SME</strong>s via financial institutions, comprising thebanking institutions and DFIs has remained strong. With the approval rate of78% in 2009, the financial institutions had approved RM50.9 billion to 140,141<strong>SME</strong> accounts. The approval rate rose further to 80% in the first-half of 2010.The six DFIs under the purview of BNM had approved a total of RM5.6 billionfinancing to 27,144 <strong>SME</strong> accounts throughout the 683 branch networks.Total financing outstanding from DFIs grew from RM14.1 billion as at end-2008to RM16.3 billion as at end-2009, representing an increase of 15.4% andreaching out to 112,288 <strong>SME</strong> accounts.%100806040The comprehensive and holisticapproach in enhancing accessto financing for <strong>SME</strong>s has raised<strong>Malaysia</strong>’s global ranking in termsof financial access as follows:• Number 1 for the thirdconsecutive year by the WorldBank on “Getting Credit” (DoingBusiness 2008, 2009, 2010);• Number 5 by Consultative Groupto Assist the Poor (CGAP) for“Loan accounts per 1,000 adults”(Financial Access Report 2009);and• Number 13 in 2009 (up fromnumber 15 in 2008) by theWorld Economic Forum for“Ease of Access to Loans”(Global Competitiveness Reports2008 - 2009 and 2009 - 2010)20020062007200820092010 1HAll customersSource: Bank Negara <strong>Malaysia</strong><strong>SME</strong>s

CHAPTER 690 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to FinancingSpecial Guarantee SchemesAmong the most effective measures introduced during the period were theguarantee schemes.• <strong>SME</strong> Assistance Guarantee Scheme (<strong>SME</strong> AGS – RM2 billion):BNM established the scheme in February 2009 to assist viable <strong>SME</strong>s,which were adversely impacted by the global crisis, to continue to haveaccess to financing from the financial institutions and at a reasonable cost.The take-up rate was overwhelming as the allocation was fully utilised byDecember 2009, benefiting 9,298 <strong>SME</strong>s in various sectors. Eligible <strong>SME</strong>scould obtain financing of up to RM500,000 per company with the supportof 80% guarantee cover provided by Credit Guarantee <strong>Corporation</strong><strong>Malaysia</strong> Berhad (CGC) at no cost.• Working Capital Guarantee Scheme (WCGS – RM7 billion):The Financing Guarantee Scheme was introduced together with theIndustry Restructuring Scheme in March 2009 as part of the secondstimulus package. The schemes were administered through a Governmentownedspecial purpose vehicle, Syarikat Jaminan Pembiayaan PerniagaanBerhad (SJPP), a company managed by Prokhas Sdn Bhd (Prokhas). TheWCGS which was aimed at providing working capital to companies withshareholders equity of below RM20 million provided up to a maximum loanamount of RM10 million and repayment period of up to five years. TheGovernment guaranteed 80% of the financing, while the remaining 20%is by financial institutions. Due to the overwhelming response, theGovernment allocated an additional RM2 billion from the RM5 billion IndustryRestructuring Financing Guarantee Scheme to WCGS to total RM7 billion.The WCGS which was closed for new applications as of October 2009 hasbenefited some 5,300 companies with a total of RM5.9 billion in loansdisbursed as at 1 July 2010. Under the Tenth <strong>Malaysia</strong> Plan (10MP), theGovernment has increased an additional allocation of RM3 billion to theWCGS, which will be effective as of 1 January 2011.• Industry Restructuring Financing Guarantee Scheme (IRFGS – RM3billion): The IRFGS was to enable <strong>SME</strong>s to retool their activity to move upthe value chain and to encourage usage of green technology. Under IRFGS,the Government provides guarantee ranging from 50% to 80% on thefinancing facility granted by the participating financial institution, dependingon the size of the shareholders’ funds of a company. The IRFGS will remainopen until end-2010 or until fully utilised before that. The maximum loanamount for the IRFGS is RM50 million to be repaid within a period of 10years. As at 1 July 2010, 228 companies have benefited with RM945.6million worth of loans approved.Credit Guarantee by CreditGuarantee <strong>Corporation</strong> (CGC)CGC continued to provide creditguarantees to <strong>SME</strong>s despite theweak economic environment. Thiswas basically to assist viable <strong>SME</strong>sto sustain or expand their businessesand help spur economic activities inthe country. In 2009, CGC guaranteedmore than 14,000 loans (2008:10,368)to all sectors of the economy valuedat RM3.1 billion, a significantachievement in a tough year.CGC also managed the shariahcompliantBumiputera EntrepreneurProject Fund (Tabung ProjekUsahawan Bumiputera-Islam(TPUB-i)), with a fund allocation ofRM300 million. The TPUB-i, originallymanaged by ERF Sdn. Bhd., providesfinancing to Bumiputera contractorswho have been awarded projects bythe Government or Government-Linked Companies and Agencies.As at end-2009, CGC had approvedloans valued at RM12.6 million to24 Bumiputera contractors.CGC’s guarantees enabled viable<strong>SME</strong>s without or with minimalcollateral and no track record to gainaccess to financing from the financialinstitutions. As at end-December2009, CGC had cumulativelyguaranteed more than 402,000 loansvalued at RM45 billion. Currently,it manages 12 guarantee schemesincluding the Green TechnologyFinancing Scheme launched inJanuary 2010.

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/10Success Stories of the <strong>SME</strong> AssistanceGuarantee SchemeFreeform Sdn Bhdclient of Alliance BankStar Forte Sdn Bhdclient of AMBank91CHAPTER 6Enhancing Access to FinancingFreeform Sdn. Bhd. was founded in 1998 by Mr. Yap JeePun. The company began publishing magazines as itscore business and gradually over the years ventured intoadvertising, media and event consultancy. Its magazineslike KLue and Junk which are now available at the variousbookstores and newsstands are published everyfortnightly. During the recent global financial crisis, thecompany needed additional cash flow to sustain itsoperations. However the company was unable to providecollateral to secure the credit facilities. Mr. Yapapproached Alliance Bank for financial advice andassistance. The bank manager evaluated his request andproposed the <strong>SME</strong> Assistance Guarantee Scheme (<strong>SME</strong>AGS) as a financial solution for his company. Thereafterthe company applied for the facility and was approved.Mr. Yap is appreciative of the initiative by the Governmentespecially during difficult periods of the global financialcrisis. Mr. Yap commended, “<strong>SME</strong> AGS is a good schemefor <strong>SME</strong> customers as it enables them to sustain and growthe business”.Star Forte Sdn Bhd (SFSB) was incorporated in 2006 andprimarily involved in the supply of corporate gifts andsouvenirs. Its customers are from various sectors and oneof its major clients is <strong>Malaysia</strong>’s famous low cost airlinecompany, Air Asia. In line with expansion plan as well asexpected increase in working capital requirement, SFSBhas approached AmBank for the <strong>SME</strong> AssistanceGuarantee Scheme (<strong>SME</strong> AGS). The management ofSFSB was delighted by the fast turnaround time offered byboth AmBank and Credit Guarantee <strong>Corporation</strong> Berhad(CGC). The management of SFSB also realised that theBase Lending Rate was at record low of 5.55% andtherefore an opportune time to get additional workingcapital funding, particularly during the economic downturnthen. As a result of the funding from <strong>SME</strong> AGS, SFSB’scash flow position has improved significantly. Overall, thebusiness operation of the company has improved, as itwas able to negotiate better terms with suppliers whileexpanding its clientele base.

CHAPTER 692 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to FinancingNL Logistics SDN BHDclient of <strong>SME</strong> BankNL Logistics Sdn. Bhd. is atransportation company that providesservices to Government agencies andprivate companies. In view of itsexpanding business and increasingnumber of contracts secured fromvarious agencies, the companyneeded additional working capital.Nevertheless, the company’s directorPuan Suhaida binti Sarijan explainedthat it was rather challenging for hercompany to secure loans fromfinancial institutions that imposedhigh collateral. She added, “Theintroduction of the <strong>SME</strong> AGS,however, has enabled the companyto apply for a loan from <strong>SME</strong> Bankwithout any collateral. TheRM500,000 loan that we receivedhas allowed the company toundertake various new projects tosupport the rising cost of operations.”Teraju Hikmat Sdn Bhdclient of RHB BankAs a general contractor engaged ininfrastructure, building and plumbingworks, Teraju Hikmat Sdn Bhd hasbeen directly affected by the increasein the price of building materialsduring the global financial crisis in2009. At that particular time, althoughthe company had secured twoprojects worth RM6.08 million, itfaced cash flow problems and wasnot able to purchase sufficientbuilding materials for the projects. Toaddress its cash flow problem, thecompany turned to <strong>SME</strong> AGS andreceived a five-year term loan worthRM350,000 in August 2009. “I am sograteful for the assistance offered by<strong>SME</strong> AGS and was further amazed atthe speed in which the loan wasapproved. Disbursement of the fundswas timely and this allowed thecompany to purchase sufficientbuilding materials required for theprojects that we had in hand,” saidthe company’s director, En. Dzain binJunat @ Abu Bakar.Feature Tour Sdn Bhdclient of Standard CharteredBankFeature Tour Sdn. Bhd., a travelagency, faced cash flow problemsduring the crisis period in 2009.The inception of <strong>SME</strong> AGS was timelyfor the company director, Mr. Quah,who found that the loan applicationprocess was straightforward andhassle-free. The company has nevertaken any loans before and the factthat no collateral is needed to securethe loan suited the company well.“The whole process was simple andstraightforward; the documentsrequired for the loan application werereasonable. The bank’s representativewas also very efficient and explainedthe terms and conditions well,” Mr.Quah quipped. The fund has easedthe company's overall cash flow intimes of difficulties and ensured thecontinuity of the business.

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1093CHAPTER 6<strong>SME</strong> Credit BureauThe <strong>SME</strong> Credit Bureau wasestablished by CGC in July 2008to assist <strong>SME</strong>s to build, maintainand enhance their credit standing,and ultimately facilitate wider andeasier access to financing. TheBureau is the leading provider ofcomprehensive and credible creditinformation and ratings on <strong>SME</strong>s in<strong>Malaysia</strong>. It is:• A convenient one-stop centrefor financiers and other creditgrantors to retrieve creditinformation and ratings on <strong>SME</strong>sfor credit evaluation purposes;and• A user friendly platform for <strong>SME</strong>sto build their track record andcredit standing to facilitate fasterprocessing of their creditapplications.As at end-June 2010, 38 financialinstitutions and 28,131 <strong>SME</strong>s havebecome members of the Bureau.The Bureau currently provides creditreports such as the following:• Self-enquiry Report which enables<strong>SME</strong>s to be aware of their owncredit standing and identify criticalareas for improvement that willenhance their credit worthiness;• Business Information Reportwhich enables <strong>SME</strong> and CreditGrantor members to review theirbusiness partner's/customer'scredit standing and ratings; and• Business Review Report whichprovides trade information andprobability of default of acompany.The Bureau also provides CreditMonitoring Services, a cost effectivemechanism to alert <strong>SME</strong>s of thecompany’s rating and any adversechanges to the company’sinformation.Overseas Credit GuaranteeFacilityIn supporting <strong>SME</strong>s to undertakeoverseas projects, the total guaranteecoverage approved under the EXIMOverseas Guarantee Facility (EOGF)of the Export-Import Bank of <strong>Malaysia</strong>Berhad (EXIM Bank) stood atRM256.8 million as at end-2009.Under the scheme, the Bank providesup to 80% guarantee to financingextended by participating financialinstitutions to eligible companiesundertaking projects overseas. Inview of the global economic crisis,the EOGF terms and conditions werealso changed in May 2009 to includethe participation of locallyincorporatedforeign banks, and theloan extended to public-listedcompanies, as well as theirsubsidiaries. As at end-June 2010,18 <strong>SME</strong>s benefited from theguarantee facility.MicrofinanceMicro entrepreneurs have accessto financing via Pembiayaan Mikrobased on the financing frameworkapproved by the National <strong>SME</strong>Development Council which requiresno collateral, minimal documentationand fast approval. Currently, there arenine participating financial institutionsof Pembiayaan Mikro comprising sixbanking institutions and three DFIs.The number of access points(including branches of participatingfinancial institutions and strategicpartners) for Pembiayaan Mikro hasincreased from 913 as at end-2006to 1,868 as at end-2009. UnderPembiayaan Mikro, financing outstandinggrew by 28.1% year-on-yearto RM709.3 million, while the numberof Pembiayaan Mikro clients grew by20.8% year-on-year to 62,798 as atend-June 2010 (end-2009: RM616.5million, 57,403 clients).In addition, the Government alsointroduced other new microfinanceschemes during the global financialcrisis.• BNM established the RM200million Micro Enterprise Fund(MEF) in November 2008 tofurther enhance access tofinancing for micro enterprises.The fund is accessible through theparticipating financial institutionsof MEF. As at end-June 2010,RM131.8 million of financing hasbeen approved to 5,945 microenterprises via this scheme (end-2009: RM79.6 million to 3,646micro enterprises);Enhancing Access to Financing

CHAPTER 694 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to FinancingVenture CapitalOutstanding investments by VentureCapitals (VCs) increased by 34%year-on-year from the RM1.9 billioninvested as at end-2008 to RM2.6billion as at end-2009, based on theSecurities Commission <strong>Malaysia</strong>Report 2009. In 2009, RM597 millionwere invested in 99 investeecompanies, resulting to a total of445 investee companies as at end-2009 (2008: RM477 million, 134investee companies). The totalcommitted funds for venture capitalinvestment had grown 17%year-on-year to RM5.4 billion as at 31December 2009, compared to RM4.6billion in 2008 largely due to highercontribution by Government Agenciesamounting to RM2.8 billion in 2009.• Agrobank was given an additionalallocation of RM300 million underthe Second Economic StimulusPackage to assist mainly farmers,small enterprises and pettytraders. In particular, retrenchedworkers during the economicdownturn was given anopportunity to venture intobusiness particularly in theagriculture and resource-basedactivities. As at end-June 2010,14,929 companies have benefitedfrom RM287.8 million in loansdisbursed. The microcredit facilitycalled Micro ESP-i (PinjamanMikro ESP-i) is collateral-andguarantor-freefinancing withmaximum amount and tenure ofup to RM50,000 and five years,respectively;• Tabung Ekonomi KumpulanUsaha Niaga (TEKUN) was givenan allocation of RM50million under the SecondEconomic Stimulus Package toassist small entrepreneurs. Thepopular fund was fully disbursedin 2009 and had benefited 5,032entrepreneurs; and• Amanah Ikhtiar <strong>Malaysia</strong> (a nongovernmentalorganisation) wasalso been given an allocation ofRM100 million to harness thepotential of self-employmentamong the poor households andlow-income in the urban areas.As at end-June 2010, 32,274poor had benefited from RM102.5million funds disbursed.There was a discerning trend towardsinvestments in new growth areas,where 25.2% of total investmentswere made in life sciences subsectors(2008: 18%), 18.7% in themanufacturing sector (2008: 27.4%),17.4% in the ICT (2008: 18.5%) and38.7% in other sectors such aseducation, electicity and powergeneration and logistics (2008:36.1%). In terms of life-cycle of theinvestee companies, 53% of theRM597.3 million was invested in 49investee companies at the expansion/growth stage, while 21.1% were forinvestee companies at the early andstart-up stage. Total amount investedin companies at the seed stagecontinued to be comparatively small,representing only 3% of totalinvestments made in 2009.

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1095CHAPTER 6Government Funds and SchemesAs at end-2009, a total of 1.9 million <strong>SME</strong>s had benefited from RM52.2 billion funds approved from85 Government funds and schemes. These funds include 79 funds which were rationalised in 2009to 33 schemes (14 grants and 19 soft loans) by a Special Committee led by the Economic PlanningUnit (EPU) to enhance the effective implementation of Government funds.Table 6.1: Performance of Government Funds and Schemes as at end-December 2009Enhancing Access to FinancingNo. ofSchemesAllocations Applications Approved Disbursed OutstandingRM Billion No. RM Billion RM Billion RM BillionSoft loans 47 28.08 1,815,426 44.01 67.41 15.74Grants* 17 4.26 61,539 3.96 2.69 0.15GuaranteeSchemesVentureCapital7 3.08 31,890 2.77 1.38 0.0612 1.29 85 0.70 0.63 0.11Equity 2 0.39 140 0.71 0.56 0.36Total 85 37.10 1,909,080 52.15 72.67 16.42*In this category, it includes venture capital fundsSource: <strong>SME</strong> <strong>Corporation</strong> <strong>Malaysia</strong>The key funds and grants include:• Grants approved by <strong>SME</strong> <strong>Corporation</strong> <strong>Malaysia</strong> (<strong>SME</strong> Corp. <strong>Malaysia</strong>) to 4,270 projectsamounting to RM143.3 million in 2009 (2008: 4,019 approvals)• Soft loan schemes by <strong>SME</strong> Corp. <strong>Malaysia</strong> through <strong>Malaysia</strong>n Industrial Development FinanceBerhad (MIDF) were consolidated into one scheme, namely the Soft Loan Scheme for <strong>SME</strong>s(SL<strong>SME</strong>). In 2009, MIDF approved 138 soft loan applications amounting to RM102.2 million,compared with 268 approvals valued at RM234.2 million in 2008.• Perbadanan Usahawan Nasional Berhad (PUNB) continued to approve financing in 2009amounting to RM141.15 million under four schemes to assist 372 Bumiputera entrepreneursin distributive trade and <strong>SME</strong> sectors. The four schemes are:• <strong>SME</strong> scheme for manufacturing, engineering and selected services sectors;• Pemborong PROSPER for the wholesale sector;• PROSPER Runcit for the retail sector; and

CHAPTER 696 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to Financing• PROSPER Siswazah for development of young Bumiputera graduates venturing into retailand distributive trade businesses.In addition, under the PROSPER Property, PUNB acquired 50 business premises at strategiclocations worth RM50.90 million to be leased out to potential Bumiputera entrepreneurs.• Five <strong>SME</strong> special funds under BNM which are channelled through participating financialinstitutions have assisted more than 44,000 <strong>SME</strong>s with total financing approvals of RM19.3billion as at end-June 2010 (end-2009: RM18.4 billion).Table 6.2Special Funds and Guarantee Schemes for <strong>SME</strong>s Administered by BNM 1Special FundsAllocations Approvals DisbursementsRM Million %As at end-June 2010LoansOutstandingUtilisationRate 2/Fund For Food 1,300.0 1,727.9 1,707.2 154.0 61New EntrepreneursFund 2Fund for Small andMedium Industries 22,850.0 3,829.4 3,569.0 2,024.1 876,750.0 13,643.4 12,583.6 5,118.8 96Micro Enterprise Fund 200.0 131.3 121.4 110.5 62BumiputeraEntrepreneurs ProjectFund - Islamic300.0 36.6 13.1 10.4 12.2Total 11,400.0 19,368.6 17,994.3 7,417.8 87.6Financial Assistanceand GuaranteeSchemes<strong>SME</strong> AssistanceGuarantee Scheme(as at 11 July 2010)2,000 2,000 1,770.1 1,530.4 1001/All funds are revolving except the Bumiputera Entrepreneurs Project Fund - Islamic2/Ratio of approvals over allocations and repaymentsSource: Bank Negara <strong>Malaysia</strong>

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1097CHAPTER 6Small Debt Resolution Scheme(SDRS)In addition to the various facilitiesavailable for early stage financing andfor expansion, there is also a schemeto assist <strong>SME</strong>s that get into financialdifficulties. Recognising the morechallenging environment that <strong>SME</strong>sare operating in, BNM enhanced theeligibility criteria of the Small DebtResolution Scheme (SDRS) in May2009. Viable <strong>SME</strong>s with nonperformingloans (NPLs) or nonperformingfinancing (NPF),irrespective of amount, and viable<strong>SME</strong>s facing financial difficulties withfinancing from multiple financialinstitutions are eligible to apply for theSDRS. As at end-June 2010, 705applications with loans amounting toRM533 million (or 71% of applicationsreceived) have been approved forrescheduling or restructuring underthe SDRS (end-2009: 684applications, RM471 million). Inaddition, financial institutions havealso proactively restructured andrescheduled financing facilities ofviable <strong>SME</strong>s, where cases haveincreased in 2008 to 3,235 (2007:1,537 cases) and in 2009 to 4,646cases totalling RM3.2 billion due tothe global crisis.Financial Advisory ServicesThe Government and the commercialbanks have established advisoryservices for individuals to seekinformation and assistance on creditissues. During the year, BNMenhanced its Integrated ContactCentre (ICC) comprising BNMLINKand BNMTELELINK that includes theComplaints Management andAdvisory Unit. BNM successfullyresolved 92% of 531 cases related toaccess to financing by <strong>SME</strong>s in 2009,of which 49% were resolved in favourof <strong>SME</strong>s following the Central Bank’sfacilitation and intervention.Contact Details:Tel: 1300 88 5465 (Toll-Free Line)Fax: 03-2174 1515 / 03-2174 1616E-mail: bnmtelelink@bnm.gov.myIn December 2008, the ABMConnectToll Free at 1300 88 9980 was alsoset up by the Association of Banks in<strong>Malaysia</strong> (ABM), which representedthe collaboration among bankinginstitutions to serve as a readyplatform for general enquiries relatingto banking and credit issues. This isin addition to <strong>SME</strong> complaint unitsand <strong>SME</strong> special units establishedat financial institutions including <strong>SME</strong>Bank and CGC to handle consumerenquiries and grievances.Contact Details:ABMConnectCall Toll-Free 1-300-88-9980E-mail: eABMConnectwww.abm.org.my/ABMConnectIn addition, <strong>SME</strong>s could also seekassistance from the “One ReferralCentre” at <strong>SME</strong> Corp. <strong>Malaysia</strong>including its state office nationwide.Business coaches and counselorshave been able to provide the variousbusiness advisory services in additionto providing information onGovernment funds, programmesand incentives available for <strong>SME</strong>s.Contact Details:Tel: 603-6207 6000Fax: 603-6201 6564E-mail: info@smecorp.gov.myInfoline: 1-300-88-1801www.smecorp.gov.mywww.smeinfo.com.myEnhancing Access to Financing

CHAPTER 698 National <strong>SME</strong> Development Council <strong>SME</strong> ANNUAL REPORT 2009/10Enhancing Access to FinancingNew Programmes and Financial Facilities in 2010The Government has allocated a total of RM5.9 billion for 39 programmes tobe implemented in 2010 to further enhance access to financing for <strong>SME</strong>s forworking capital and business expansion locally and globally, as well as to assist<strong>SME</strong>s at the start-up and early stage. There have been seven new schemesestablished in 2010 to assist <strong>SME</strong>s, particularly in the services and agriculturesectors, as well as to promote entrepreneurship among micro enterprises andschool leavers.Table 6.3New programmes in 2010Ministry/Agency Programmes (RM million)JPM - FELDA Skim Insentif Usahawan Felda (SIUF) 10MOFMOFMID SabahMID SabahMID SabahMID SabahCreative Industry(Bank Simpanan Nasional)Ar-Rahnu Micro Programme(Yayasan Pembangunan EkonomiIslam <strong>Malaysia</strong>)Sabah Bumiputera EntrepreneurFinancing Scheme (SPUBS)Sabah Women EntrepreneurFinancing Scheme<strong>SME</strong> Machine and MachineryPurchase Aid SchemeFinancing Scheme for TechnicalSchool Leavers and WorkshopOwners501482. 217.6Source: <strong>SME</strong> Integrated Plan of Action 2009, <strong>SME</strong> <strong>Corporation</strong> <strong>Malaysia</strong>The new and early start-up companies may avail to various specific schemes,such as:• Skim Belia Tani-i/Skim Belia Niaga (Agrobank);• Initiative Financing Scheme (AIM);• PUNB <strong>SME</strong> Scheme (formanufacturing and servicessector) and PUNB PROSPERSchemes (for retail anddistributive trade sector);• Financing Scheme for TechnicalSchool Leavers and WorkshopOwners (SEDCO Sabah); and• Financing Scheme for <strong>SME</strong>sto Purchase Machines andEquipment (SEDCO Sabah).During the year, Government grantswill be continuously rationalised in amove to enhance its effectiveness,with the intention to be graduallyphased out and replaced with softloans or reward-based schemes.The more sustainable financingschemes would promote goodcredit culture and enhance financialdiscipline among <strong>SME</strong>s as well as toexpand its utilisation to more <strong>SME</strong>sbesides preparing the borrowers tomove towards a market basedscheme in future. As a CentralCoordinating Agency, <strong>SME</strong> Corp.<strong>Malaysia</strong> is also tasked to ensure thatfinancial assistance schemes by allrelevant Ministries and GovernmentAgencies across all economic sectorsare monitored for its effectiveness infacilitating <strong>SME</strong>s to progress up thevalue chain. <strong>SME</strong> Corp. <strong>Malaysia</strong> alsopromotes financial inclusion for <strong>SME</strong>sespecially microenterprises. In thiscontext, the expected outcome of thevarious financing schemes will bemonitored in the following areas:

National <strong>SME</strong> Development Council<strong>SME</strong> ANNUAL REPORT 2009/1099CHAPTER 6• Non-performing loans;• Viability of <strong>SME</strong>s after two yearsfrom receiving the financialassistance;Enhancing Access to Financing• Business improvement in termsof turnover and profitabilitygrowth;• Increase in number of ruralentrepreneurs with highermonthly income; and• Increase in number ofentrepreneurs developed.New Financing Schemes Introduced in 2010In addition, <strong>SME</strong> Corp. <strong>Malaysia</strong>will assess and ensure <strong>SME</strong>s inthe new growth areas haveadequate accessibility to financing,at a reasonable cost. Theseinitiatives are in line with theGovernment’s vision to integrate<strong>SME</strong>s into the New EconomicModel (NEM) that will primarilybe based on innovation, creativityand high value-added services, aswell as human capital development.The Creative Industry Fund (CIF) amounting to RM200 million announcedduring the 2010 Budget is administered by Bank Simpanan Nasional (BSN).The Scheme is to finance activities such as film and drama productions, music,animation, advertisements and local content development, with the intentionof boosting commercial activities in the local creative industry. Eligible <strong>SME</strong>swill be extended credit facility ranging from RM50,000 to RM5 million atcompetitive interest rates of between 2% to 4% for a duration of up to fiveyears.The Government announced the RM1.5 billion Green Technology FinancingScheme (GTFS) during the Budget 2010 speech in October 2009 to promoteinvestments in Green Technology. The Government provides a guarantee of60% on the financing amount via the Credit Guarantee <strong>Corporation</strong> Berhad(CGC), while the remaining 40% financing risk is borne by the participatingfinancial institutions. The Scheme came into effect on 1 January 2010 for aperiod of three years or until the Scheme limit of RM1.5 billion is reached.<strong>Malaysia</strong> Green Technology <strong>Corporation</strong> (formerly known as Pusat Tenaga<strong>Malaysia</strong>) has been tasked to conduct technical audits on applicants of thescheme which include green technology providers as well as users of greentechnology, to ascertain eligibility. Applicants who are eligible will be awarded aGreen Technology certificate, which will then entitle them to apply for financingunder the GTFS. As at 9 July 2010, 33 projects have been awarded the GreenTechnology certification, with potential financing amounting to RM957 million.Four projects have been granted financing under GTFS, with total financingamount of RM108.3 million.

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