Agrobank And SJPP Ink Agreement To Offer Government Guarantee Scheme For SME’s And MSCs

Business Today

24 January 2022

Agrobank And SJPP Ink Agreement To Offer Government Guarantee Scheme For SME’s And MSCs

Agrobank and Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) inked an agreement to assist Malaysian Small and Medium Enterprises (SMEs) and Mid-Sized Companies (MSCs) to recover and emerge stronger during the current economic recovery phase under the Keluarga Malaysia Government Guarantee Scheme.

Newly appointed, President/Chief Executive Officer of Agrobank, Tengku Ahmad Badli Shah Raja Hussin, said, the financing scheme will be made available to a wider target market of Malaysian SMEs and MSCs with annual revenue of not more than RM250 million.

“The scheme is part of the PEMULIH Assistance Package announced on 28 June 2021 with the allocation of RM20 billion Government Guarantee under the PEMULIH Government Guarantee Scheme.

“The SMEs and MSCs that are in need of assistance, may apply and utilise the facility for new/or additional working capital and/or capital expenditure (CAPEX) to purchase the necessary equipment to improve their business landscape,” he said this after the signing ceremony of the ‘Letter of Offer’ between Agrobank and SJPP held recently.

According to Tengku Ahmad Badli Shah, the partnership between Agrobank and SJPP is timely with the bank’s direction in 2022 to focus on facilitating the economic recovery among the business owners and nourish the agriculture sector in Malaysia.

“The unique features included in the scheme are intended for more Malaysian SMEs and MSCs to be able to reap the benefit of the government assistance, recover from the revenue shock and dwindling cash reserves arising from the COVID-19 pandemic. The financial facility, however, cannot be used to refinance existing facility granted by the same or other participating FIs.”

“This facility will be available up to the end of December 2022 and it will be beneficial for start-up companies with at least 6 months operation to less than three years,” he further commented.

The type of financing that is applicable under the KMGGS through this partnership is the Term Financing-i, Agro Cash Line-i, Trade Facility-i and Modal Kerja-i.

SJPP Principal Officer, Chen Yin Heng said “This will assist eligible SMEs and MSCs to obtain much-needed additional financing, restructuring of existing loans and/or additional working capital to support them in their business recovery and to reduce their financial burden,” said Chen.

Among the enhanced key features and benefits of PGGS are:

  • Open to SMEs and MSCs in all industries with annual revenue of not more than RM500 million based on their audited accounts or income tax returns (previously it was RM250 million).
  • Guarantee cover of 80% by the government for new financing facilities as well as the restructuring of existing financing facilities with further funding of working capital for these SMEs and MSCs to revitalise their business.
  • 12 months moratorium and a minimum of 3 years of extended tenure to reduce the financial burden of companies affected by the COVID-19 pandemic.

SJPP is allocating RM800 million under PGGS for financing facilities for AgroBank’s customers. The company guarantees a fee of between 0.75% to 1.0% per annum, coupled with the underlying Government Guarantee that would offer the companies competitive rates of financing by the FIs of up to RM20 million.

Government Guarantee Schemes that were established by the Government and managed by SJPP has been vastly utilised by many SMEs in all industries such as in manufacturing, services, retail, and trade. To date, more than RM47.0 billion guarantees have been provided to over 45,000 SMEs and the allocation has helped them tremendously to sustain their businesses especially during the COVID-19 pandemic.

 

(Web source: https://www.businesstoday.com.my/2022/01/24/agrobank-and-sjpp-ink-agreement-to-offer-government-guarantee-scheme-for-smes-and-mscs/)