Flexi Guarantee Scheme (FGS)

Objective

Flexi Guarantee Scheme (FGS) provides guarantee for financing granted under BNM’s Funds for SME-All Economic Sectors Facility.

The funds are designed to facilitate greater access to financing for viable Malaysian Small and Medium Enterprises (SMEs).

Main Characteristic

Among the main characteristics of the FGS are:

  • Guarantee cover ranging from 30% – 80% as required by participating financial institutions.
    • Annual guarantee fee, calculated based on the guarantee cover issued and payable in advance. Fees will be borne by the participating financial institutions.
    • Secured Portion     :-Between 0.50% and 1.85% per annum.
    • Unsecured Portion:-Between 0.80% and 2.15% per annum.
  1. i) Payment of Guarantee Fee.
  • New Letter of Guarantee (LG) – Payable upon request for LG by Financial Institution (FI).
  • Anniversary LG – Payable on or before LG anniversary date.
  1. ii) Refund of Guarantee Fee
  • Refund of guarantee fee will be pro-rated on a monthly basis. The utilised period is calculated from the month of LG/Anniversary LG until the month of cancellation/amendment.
  • The refund of guarantee fee on a pro-rated basis is applicable for LGs that are cancelled or amended by CGC commencing 2nd Jan 2013 onwards.

Application Procedures

The financing application is made through any participating financial institutions. Approval will be subjected to normal vetting procedures and security requirements of the participating financial institutions.

All Economic Sectors Facility

Purpose of Financing

  • Capital expenditures; or/and
  • Working capital

Financing should not be used for:

  • Purchase of shares;
  • Refinancing of existing credit/financing facilities;
  • Purchase of land/real estate investment;
  • Property development;
  • Investment by investment holding companies;
  • Activities where the stock in trade is money (including credit, leasing, factoring and insurance businesses);
  • Gambling, alcohol, tobacco or other similar type of activities and products; and
  • Non-Shariah compliant business activities (applicable for Islamic financing).

Eligibility Criteria

  • Meet National SME Development Council’s (NSDC) SME Definition (for details, please click here)
  • Business is registered with the Companies Commission of Malaysia (SSM); or authorities/district offices in Sabah and Sarawak; or statutory bodies for professional service providers;
  • Shareholding by Public Listed Companies and Government Linked Companies (if any) in the SMEs shall not exceed 20%;
  • Malaysians residing in Malaysia hold a minimum of 51% shareholding in the SMEs.

Maximum Financing Rate : 5.00% to 7.00% per annum
Maximum Tenure : Up to 5 years
Minimum Financing  : No minimum amount
Maximum Financing : RM5 million per SME. Related SMEs with common shareholder(s) to have separate limits on the maximum amount of financing under BNM’s Fund for SMEs, subject to each SME having separate workforces.

Participating Financial Institutions (PFIs)

Applicable to all PFIs defined as follows:-

  • All licensed banks under the Financial Services Act 2013 (FSA);
  • All licensed Islamic banks under the Islamic Financial Services Act 2013 (IFSA);
  • All prescribed development financial institutions under the Development Financial Institutions Act 2002 (DFIA)

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Franchise Financing Scheme (FFS)

Eligibility Criteria

  • All Malaysian owned and controlled companies with net assets or shareholders’ funds not exceeding RM1.5 million;
  • Meet National SME Development Council’s (NSDC) SME definition( for details, please click here );
  • The existing total credit facilities of the borrower should not exceed RM7.5 million. The borrower should not have any adverse record in respect of borrowing from any other financial institution or other agencies.

Maximum Loan Limit

  • RM7.5 million

Type of loan facilities covered

  • Term Loan;
  • Overdraft;
  • Trade Financing;
  • Any other credit facilities determined from time to time by the Corporation.

Interest Rate

  • The prescribed rate of interest charged by the PFIs will not exceed BLR +1.5%, while the actual cost to the borrower will be reduced through payment of subsidised interest whereby Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) via CGC will pay the difference for the loan interest in the manner as follows:
    Loan Duration Interest Rate Subsidised rate
    Year 1 & 2 BLR + 1.5% 6%
    Year 3 BLR + 1.5% 4%
    Year 4 BLR + 1.5% 2%
    Year 5 onwards BLR + 1.5%

    Participating Financial Institutions

    • Maybank
    • CIMB Bank

    Guarantee Coverage

    • Unsecured portion will be covered 80% and 90% on the secured portion.

    Guarantee Fee

    Total credit facilities Unsecured Portion Secured Portion
    Loans up to RM1 million 0.75% 0.50%
    Loans above RM1 million 1.00% 0.50%

    1. Payment of Guarantee Fee
      • New Letter of Guarantee (LG) – Payable upon request for LG by Financial Institution (FI).
      • Anniversary LG – Payable on or before LG anniversary date.
    2. Refund of Guarantee Fee
      • Refund of guarantee fee will be pro rated on monthly basis. The utilised period is calculated from the month of LG/Anniversary LG until the month of cancellation/amendment.
      • The refund of guarantee fee on pro rated basis is applicable for LGs that are cancelled or amended by CGC commencing 2nd Jan 2013 onwards.

    Application Procedures

    • The Franchisor must be registered with MDTCC before the Franchisees can apply through this scheme.
    • MDTCC will ensure the validity of the franchisor and legal relationship between franchisor and franchisee.
    • MDTCC will compile the complete loan application together with working paper and forward it to the financial institution to proceed.
    • Upon receipt of the guarantee application from the financial institution, CGC will process and issue the guarantee letter accordingly.

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Green Technology Financing Scheme (GTFS) & Green Technology Financing Scheme Islamic (GTFS – i) 2.0

Objective

Green Technology has been envisaged as one of the emerging drivers of economic growth for Malaysia. GTFS/GTFS-i 2.0 was established by the Government aimed to encourage local companies and entrepreneurs to be involved in green technology-based projects to support the national green technology agenda.

Purpose of Financing

  • Producer of Green Technology – to finance investment for the production of green technology products
  • User of Green Technology – to finance investment for the utilisation of green technology
  • Energy Services Company (ESCO) – to finance investment or assets related to energy efficient projects and/ or energy performance contracting

The Scheme is applicable for financing of:

  1. Capital Expenditure
    For purchase of equipment; for both new and re-conditioned equipment.
  2. Working Capital
    The maximum loan/ financing facility amount allowed for working capital is up to RM5 million

The following purposes are not eligible under the Scheme:

  • For refinancing or restructuring of existing loan / financing facilities
  • For financing of Research and Development cost
  • For projects which have already been completed and financed

Eligibility Criteria

  • The scheme shall only be available to the following categories:
    i. Producer of Green Technology
    ii. User of Green Technology
    iii. Energy Services Company (ESCO)
  • Company must be legally registered in Malaysia, Malaysian-owned and controlled with at least 51% shareholding
  • Sectors eligible are as follows:
    i. Energy
    ii. Manufacturing
    iii. Transportation
    iv. Building
    v. Waste
    vi. Water
  • Company with Green Project Certificate issued by Malaysian Green Technology and Climate Change Centre (MGTC)

Maximum Loan/ Financing Limit

  • Producer of Green Technology: RM100 million
  • User of Green Technology: RM50 million
  • Energy Services Company (ESCO): RM25 million

Maximum Loan/ Financing Tenure

  • Producer of Green Technology: Up to 15 years
  • User of Green Technology: Up to 10 years
  • Energy Services Company (ESCO): Up to 5 years

Type of Loan/ Financing facilities

  • All types of facilities for both Conventional loan and Islamic financing

Guarantee Cover

  • 60% guarantee on the approved loan/ financing which shall only be confined to the value stated in the Green Project Certificate issued by Malaysian Green Technology and Climate Change Centre (MGTC)

Participating Financial Institutions

  • All commercial and Islamic banks, and Development Financial Institutions (DFIs) licensed by Bank Negara Malaysia
  • Other participating institutions duly approved by the Ministry of Finance

Interest/ Profit Rate

  • To be determined by the Participating Financial Institutions

Government Incentive

  • 2% per annum interest/ profit rate reimbursement for the first seven (7) years of the loan/ financing based on the Letter of Confirmation issuance date

Application Procedures

  • Applicants are to submit application to Malaysian Green Technology and Climate Change Centre (MGTC) at www.gtfs.my for green project certification
  • Successful applicants then proceeds to forward application for financing to any Participating Financial Institutions

Application Period

  • The scheme is made available until 31st December 2020 or upon approval of loan/ financing up to RM2 billion, whichever is earlier or any subsequent extension on the availability date.
  • The available balance for the scheme is as follows:
    Available balance (RM) (as at 15th October 2020)

    1,506,362,100*

    *Note: excluding cancelled due to unmaterialised applications


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