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)
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
Eligibility
- Shareholders’ funds not exceeding RM2 million.
- Wholly-owned Bumiputera institutions incorporated under the Companies Act 1965, the Co-operative Societies Act 1993, the Societies Act 1966, Bumiputera citizens residing in Malaysia and Bumiputera entrepreneurs registered under the Registrar of Business or any other authoritative bodies; or
- Must fall within the definition of SMEs ( for details, please click here)
- Small and medium-sized Bumiputera enterprises participating under the vendor development programme of the Ministry of Entrepreneur Development or Ministry of Finance with at least 70% Bumiputera equity and management control.
Eligible Sectors : All economic sectors
Maximum Financing Rate : 4.0% to 6.0% per annum
Maximum Tenure : Up to 5 years
Minimum Funding : No
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 Islamic banks
- SME Bank
- Malaysian Industrial Development Finance Bhd
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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)
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); and
- All prescribed development financial institutions under the Development Financial Institutions Act 2002 (DFIA)
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: –
- i) 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;
- ii) registered with the Companies Commission of Malaysia (SSM), authorities / district offices in Sabah and Sarawak or statutory bodies for professional service providers; and
- iii) 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
- 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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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:
- Capital Expenditure
For purchase of equipment; for both new and re-conditioned equipment. - 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 Corporation and the certificate must be within the validity period
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 Corporation
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 Corporation 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
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