[Bank Negara Malaysia] Additional Measures to Further Support SMEs and Individuals Affected by the COVID-19 Outbreak

Bank Negara Malaysia (BNM) had announced additional measures to support SMEs and individuals to cushion the impact of disruptions caused by COVID-19 outbreak.

A. Enhancements to Financing Facilities to Assist Affected SMEs, Safeguard Jobs and Support Growth

BNM is enhancing the existing financing facilities under the BNM’s Fund for SMEs (the Fund), and increasing the allocation of the facilities by an additional RM4.0 billion to RM13.1 billion.

The enhancements under the Fund entail the following:

  1. An increase in the allocation of the Special Relief Facility (SRF), from RM2 billion to RM5 billion, to provide relief assistance to more SMEs who are affected by the COVID-19 outbreak. The maximum financing rate is now lowered from 3.75% p.a. to 3.50% p.a. The enhanced SRF is available until 31 December 2020.
  2. An increase in the allocation of the All Economic Sectors (AES) Facility, from RM5.8 billion to RM6.8 billion, to enhance access to financing for SMEs and to support growth. The maximum financing rate is also reduced from 8% p.a. to 7% p.a.

In addition to the above, SMEs can also avail themselves to 3 other facilities under the Fund, namely the Automation and Digitalisation Facility (ADF), Agrofood Facility (AF) and Micro Enterprises Facility (MEF). Detailed features of the facilities under the Fund are attached.

Interested SMEs may call or email the participating financial institutions (PFIs) or visit the business financing referral platform at imsme.com.my, to apply for the financing. The PFIs are commercial banks, Islamic banks and development financial institutions regulated by BNM. SMEs can also avail themselves to Credit Guarantee Corporation Malaysia Berhad’s (CGC) BizMula-i and BizWanita-i schemes for financing of up to RM300,000.

Participating financial institutions can also seek guarantee coverage from CGC or Syarikat Jaminan Pembiayaan Perniagaan (SJPP) for these facilities.

The SRF, AF and ADF were announced as part of the first economic stimulus package on 27 February 2020. Since these facilities were made available on 6 March 2020, participating FIs have approved a total of RM119 million of financing to 196 SMEs, with an approval rate of 84%.

Participating FIs will continue to process the applications received under these facilities, although there may be some delays in the applications and disbursements process due to the limitations arising from the Movement Control Order.

B. Programme to Support the B40 Segment in Generating Sustainable Income and Achieve Financial Resilience (iTEKAD)

To further facilitate access to funding and help build entrepreneurship capability among B40 micro-entrepreneurs, a social finance programme will be introduced by participating Islamic banks in collaboration with some State Islamic Religious Councils (SIRCs) and implementation partners.

Social finance (zakat, waqf and sadaqah) offers significant potential to facilitate distribution of funds in a more balanced and inclusive manner. The programme is designed to mobilise social finance contributions towards providing seed capital that is packaged with microfinancing for eligible micro-entrepreneurs to start and grow business to generate sustainable income.

As a start, Bank Islam Malaysia Berhad (BIMB) will be the first participating Islamic bank to pilot the iTEKAD programme beginning May 2020. The initial programme optimises zakat and microfinancing arrangement, and will include cash waqf at the later stage. The implementation of the programme involves on-boarding and educating recipients as well as monitoring their success which will be undertaken in collaboration with Majlis Agama Islam Wilayah Persekutuan (MAIWP) and SME Corporation Malaysia (SME Corp). In addition to obtaining funds to start the business, the selected recipients will also receive structured training on entrepreneurship and financial management by SME Corp, and support to develop a viable business venture of their choice. BIMB will be providing further details on the programme, in particular the mechanics and features as well as application process in due course. After the pilot, the Bank plans to roll-out the iTEKAD programme to more financial institutions and in more states.

Please click here for the Features of BNM’s Financing Facilities to Assist Malaysian SMEs. 

For more information, please visit www.bnm.gov.my.