Get an SME Loan in Malaysia
The vast majority of businesses in every country in the world are SMEs. They are the lifeblood of every economy. They are represented in the place on the corner where you buy your groceries, the place that dry-cleans your clothes, and the place that fixes your air-conditioner. Even if a shop has a world-famous brand on the sign, there’s a good chance that it’s a privately-owned franchise.
The prevalence of SMEs in every community presents financial institutions (FIs) with a strange dilemma. To start any of these businesses would normally take an SME loan. But with the sheer volume of loan applications coming from the SME sector in every industry, every FI has to stick to their qualification regulations more rigorously.
A good portion of business owners launching SMEs have never owned or run a business before. From the talented dress designer who wants to launch her own line of clothing, to the young startup entrepreneurs looking to make life easier with their innovations.
What they have is plenty of talent, ambition and drive; what they lack is loan collateral. For the FIs who are witnessing hundreds of viable business partners having to be turned down, the problem is too much volume. And for the business owners, it’s not having independent resources you can access until you get your company off the ground.
An Elegant Solution
Syarikat Jaminan Pembiayaan Perniagaan (SJPP) was created as a wholly-owned subsidiary of the Minister of Finance Incorporated to bridge the gap between the business owners and the FIs and to enable them to work together.
The government of Malaysia set the schemes up in 2009 to address the problems associated with providing financing to viable SMEs that didn’t meet commercial lender eligibility requirements. The government saw these requirements, though necessary to ensure stability on the part of the FIs, as preventing the economy from developing fully.
Government Guarantee
By stepping up as a guarantor of working capital extended to SMEs by the lenders, the Malaysian economy was given a kick-start. Today there are nine of these working capital guarantee funds to address all areas and business sectors.
What they offer is available funding within a specific maximum and minimum depending on the scheme you apply under. These nine schemes cover the following areas:
- Working Capital Guarantee Scheme (WCGS)
- Working Capital Guarantee Scheme – Start Up (WCGS-SU)
- Working Capital Guarantee Scheme – Bumiputera (WCGS-B)
- Working Capital Guarantee Scheme – Export (WCGS-X)
- Working Capital Guarantee Scheme – Women (WCGS-W)
- Automation & Digital Guarantee Scheme (ADGS)
- Special Schemes for COVID-19 under BNM
- PENJANA Tourism Financing Facility (PTF)
- Bus and Taxi Hire Purchase Rehabilitation Scheme
Each of these schemes has its own qualifications and funding amounts that reflect the industry and type of owners it’s aimed at.
These schemes allow FIs to offer an alternative source of financing to viable businesses that nevertheless fall short of qualifying under the lender’s eligibility requirements. For thousands of SMEs across Malaysia, these schemes have helped boost the local economy and provide much-needed jobs.
To find out more about what these schemes could mean for the success of your SME, please contact your financial institution or visit the SJPP website.
