Flexi Guarantee Scheme (FGS)

Objective

Flexi Guarantee Scheme (FGS) provides guarantee for loans granted under Fund for Small and Medium Industries 2 (FSMI2) and New Entrepreneur Fund 2 (NEF2).

The funds are designed to facilitate greater access to credit for viable Malaysian Small and Medium Industries (SMIs).

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.
- Unsecured Portion :-Between 0.8% and 2.15% per annum.
- Secured Portion :-Between 0.5% and 1.85% 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 loan application is made through any participating financial institutions. Approval will be subjected to normal vetting procedures and security requirements of the participating financial institutions.

Fund for Small and Medium Industries 2 (FSMI2)

Purpose of Financing

Expansion of productive capacity
Working capital; or both

Financing should not be used for:

Purchase of shares
Refinancing of existing credit facilities
Purchase of land and properties for investment purposes

Eligibility Criteria

Shareholders’ funds not exceeding RM2 million.
Malaysian-owned institutions (at least 51%) incorporated under the Companies Act 1965, the Co-operative Societies Act 1993, the Societies Act 1966, citizens residing in Malaysia and entrepreneurs registered under the Registrar of Business or any other authoritative bodies.
Must fall within the definition of SMEs ( for details, please click here)
Franchise businesses can apply under this scheme.

Eligible Sectors : All economic sectors except for money exchange activity.
Maximum Financing Rate : 4.0% to 6.0% per annum
Maximum Tenure : Up to 5 years
Minimum Funding : RM50,000
Maximum Funding : RM5 million

Participating Financial Institutions (PFIs)

All commercial banks
All Islamic banks
SME Development Bank Malaysia Bhd
Malaysian Industrial Development Finance Bhd
Agrobank
Sabah Development Bank Bhd

PFIs Eligible For CGC Guarantee

All commercial banks
All finance companies
SME Bank

New Entrepreneur Fund 2 (NEF2)