Flexi Guarantee Scheme (FGS)

Objective

Flexi Guarantee Scheme (FGS) provides guarantee for financing granted under BNM’s Funds for SME-All Economic Sectors (other than SMEs in the Primary Agriculture Sector and Micro Enterprises)

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.

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.

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.

SME-All Economic Sectors

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-Shari’ah-compliant business activities (applicable for Islamic financing).

Eligibility Criteria

  • Must fall within the definition of SMEs (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;
  • Shareholder’s fund do not exceed RM5 million;
  • 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.

Eligible Sectors : All economic sectors (other than SMEs in the Primary Agriculture Sector and Micro Enterprises)
Maximum Financing Rate : 6.00% to 8.00% per annum
Maximum Tenure : Up to 5 years
Minimum Financing  : No minimum amount
Maximum Financing : RM5 million

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.

Must fall within the definition of SMEs ( 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

Credit Facilities Covered

  • Term Loans
  • Overdrafts
  • Trade Financing
  • Any other credit facilities determined from time to time by the Corporation.

Interest Rate

The prescribed rate of interest charged by the Financial Institutions 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 BLR + 1.5%

Guarantee Coverage

Percentage of Guarantee Cover
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 utilized 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.

Participating Institutions

  • Maybank
  • CIMB Bank

Application Procedures

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

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Disaster Relief Facility 2017 (DRF) & Disaster Relief Facility-i 2017 (DRF-i)

Objective

The objective of the Disaster Relief Facility 2017 (DRF) and Disaster Relief Facility-i 2017 (DRF-i) is to alleviate the problems faced by the Small and Medium Enterprises (SMEs) affected by the recent floods, through the provision of new financing to the businesses, to enable them to resume their business operations.

Total Allocation

RM500 million

Application Procedures

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

Participating Financial Institutions (PFIs)

  • All commercial banks under the Financial Services Act 2013 (FSA) and Islamic banks under the Islamic Financial Services Act 2013 (IFSA);
  • Bank Kerjasama Rakyat Malaysia Berhad;
  • Bank Pembangunan Malaysia Berhad;
  • Bank Pertanian Malaysia Berhad (Agrobank);
  • Bank Simpanan Nasional
  • Export-Import Bank of Malaysia Berhad; and
  • Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank)

Scheme Availability

This scheme is available from 8 November 2017 until 31 May 2018

Eligibility Criteria

  • Meet National SME Development Council’s (NSDC) SME definition (for details, please click here).
  • Malaysians residing in Malaysia hold a minimum of 51% shareholding in the SMEs.
  • SMEs that fulfil the following criteria shall be eligible for financing from the Fund: –
    1. located in the districts that are affected by disasters as identified by National Disaster Management Agency (for details, please click here) or other competent authorities;
    2. registered with the Companies Commission of Malaysia (SSM), authorities / district offices in Sabah and Sarawak or statutory bodies for professional service providers; and
    3. shareholding by Public Listed Companies and Government Linked Companies (if any) in the SMEs shall not exceed 20%.

Type of Facility

Term financing only

Financing Amount

  • No minimum amount
  • Maximum financing amount of RM500,000 per SME inclusive of financing to related companies that have common shareholder(s)

Purpose of Financing

  • Repairs and / or replacement of assets for commercial use (e.g. plants and machinery) which have been damaged by natural disasters; and / or
  • Working capital

Financing should not be used for:

  • Refinancing of existing credit / financing facilities;
  • Non-Shari’ah-compliant business activities (applicable for DRF-i 2017)

Effective Profit Rate

  • 2.25% per annum
  • No collateral is required for this Facility

Financing Tenure

Up to FIVE (5) years from the date of the first drawdown, including a moratorium period of SIX (6) months on both principal and profit payments and non-classification of the financing as impaired during the moratorium

Guarantee Coverage

  • BNM via CGC shall provide a 60% guarantee cover on the principal and normal profit rate while the remaining financing risk of 40% shall be borne by the PFIs
  • The guarantee cover shall remain in force up to the maturity date of the facility with a maximum tenure of FIVE (5) years

Guarantee Fee

No guarantee fee shall be charged to the customer


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