Recently I read the press statement from Bank Negara Malaysia(BNM) website, BNM announced the establishment of a RM2 billion SME Assistance Guarantee Scheme (SAGS).
According to BNM the objective is to ensure that viable SMEs adversely impacted by the current economic slowdown continue to have access to adequate financing.
Eligible SMEs can obtain financing of up to RM500,000 per SME under this Scheme for tenures of up to 5 years. The Credit Guarantee Corporation Berhad (CGC) will provide an 80% guarantee cover for financing approved under this Scheme. The guarantee cover will be provided free of charge and the cost of the guarantee will be fully borne by Bank Negara Malaysia. Financing obtained under this Scheme is for new financing only and must be used for business purposes, such as working capital, project financing and capital expenditure.
This scheme can be accessed at any commercial and Islamic bank, SME Bank, Agrobank, Bank Rakyat, EXIM Bank and Bank Simpanan Nasional. Participating financial institutions will determine the lending or financing rate to be charged and applications are subject to the normal credit approval process of the participating financial institutions. Applications for this Scheme will be open from 3rd February 2009 till 31st December 2009 or when the financing limit of RM2 billion has been fully utilised.
For further details, SMEs can approach the participating financial institutions or contact BNMTELELINK at 1-300-88-5465 or visit the BNM website at www.bnm.gov.my.
Yesterday, I make a call to BNMTELELINK, the officer told me that I need to enquiry this product directly through the participating financial institutions.
Today I make a phone call to Public Bank to know how this scheme work, but the officer told me that they still yet to receive any information from the head office. I have a short chat with the officer and she told me that previously there is also a scheme SME Assistance Facility which commemcing on 1st Aug 2008 and maximum financing of RM1.5 million per SME. And this SAGS scheme is the subsequent scheme that introduce by BNM.
For the SME Assistance Facility, Credit Guarantee Corporation (CGC) will provide 80% guarantee cover on principal and normal interest and risk on the remaining 20% will be borne by the participating financial institutions. And the interest rate is only at 4%p.a.
The documents need to apply for the loan as follow:
1. If for the Senderian Berhad company the audited account for the past 3years, and for the sole proprietor unaudited account for the past 3 years.
2. Bank current account statement for the past 6months.
3. Form 9, 24 & 44 for Senderian Berhad. For the sole proprietor business registration.
4. For the Senderian Berhad the directors personal income tax "Borang B" for the past 2 years.
5. Memorandum & article for the Senderian Berhad.
As this kind of scheme that been gurantee by the CGC, the banks should be more aggressive to provide the loan to assist the SMEs who face the difficult time.
How well can the SMEs utilise the loans that provide by the banks? Can the SMEs and the bank over come this global recession.
Normally SMEs borrowing is for working capital, and the profit should be greater than the cost., in order for the SMEs have the ability to repay the loan. And at this global recession time, most of the stock and assest value come down, if the SMEs purchase the stock and assets last 2years the chances for its stock or assets value come down is high.
For example, if a company purchase a factory which cost him RM500,000 and it pay the deposit of RM 100,000 and the remaining finance it for 25years and at the interest rate of 6%p.a.. and monthly installment at 2577. After repayment for a year the remaining outstanding loan still around RM 392,879. And now it face the difficult time and have the tight cash-flow for the repayment. Moreover the market price of the factory may come down, if we make assumption it come down 10%, the current value of the factory may only at RM 450,000. If it would like to sell it, it may need to find another place to continue the business. If it sell it at market price of RM450,000 after deduct the loan, the company only get around RM 57,121 this excluded any cost of selling the factory. So for this example, if the corporation foresee the business still have the bright future and he just need to over come the recession then the company can make ton of money while the economy boom, the shareholders may consider either to pump-in his own money to the company or borrow more money for the purpose of working capital.
So it real life, if you are the shareholders of the company, would you like to sell the factory and get the money or would you continue to support the company either in term of injecting the capital or support it take loan ?
And if the corporation would like to take loan, which bank dare to borrow it? By the loan schemen provide, this may boost the borrowing. But how effective & efficiency can the banks provide the loan, this is one of the key component?
Time is value for money!
Reference:
1. www.bnm.gov.my
According to BNM the objective is to ensure that viable SMEs adversely impacted by the current economic slowdown continue to have access to adequate financing.
Eligible SMEs can obtain financing of up to RM500,000 per SME under this Scheme for tenures of up to 5 years. The Credit Guarantee Corporation Berhad (CGC) will provide an 80% guarantee cover for financing approved under this Scheme. The guarantee cover will be provided free of charge and the cost of the guarantee will be fully borne by Bank Negara Malaysia. Financing obtained under this Scheme is for new financing only and must be used for business purposes, such as working capital, project financing and capital expenditure.
This scheme can be accessed at any commercial and Islamic bank, SME Bank, Agrobank, Bank Rakyat, EXIM Bank and Bank Simpanan Nasional. Participating financial institutions will determine the lending or financing rate to be charged and applications are subject to the normal credit approval process of the participating financial institutions. Applications for this Scheme will be open from 3rd February 2009 till 31st December 2009 or when the financing limit of RM2 billion has been fully utilised.
For further details, SMEs can approach the participating financial institutions or contact BNMTELELINK at 1-300-88-5465 or visit the BNM website at www.bnm.gov.my.
Yesterday, I make a call to BNMTELELINK, the officer told me that I need to enquiry this product directly through the participating financial institutions.
Today I make a phone call to Public Bank to know how this scheme work, but the officer told me that they still yet to receive any information from the head office. I have a short chat with the officer and she told me that previously there is also a scheme SME Assistance Facility which commemcing on 1st Aug 2008 and maximum financing of RM1.5 million per SME. And this SAGS scheme is the subsequent scheme that introduce by BNM.
For the SME Assistance Facility, Credit Guarantee Corporation (CGC) will provide 80% guarantee cover on principal and normal interest and risk on the remaining 20% will be borne by the participating financial institutions. And the interest rate is only at 4%p.a.
The documents need to apply for the loan as follow:
1. If for the Senderian Berhad company the audited account for the past 3years, and for the sole proprietor unaudited account for the past 3 years.
2. Bank current account statement for the past 6months.
3. Form 9, 24 & 44 for Senderian Berhad. For the sole proprietor business registration.
4. For the Senderian Berhad the directors personal income tax "Borang B" for the past 2 years.
5. Memorandum & article for the Senderian Berhad.
As this kind of scheme that been gurantee by the CGC, the banks should be more aggressive to provide the loan to assist the SMEs who face the difficult time.
How well can the SMEs utilise the loans that provide by the banks? Can the SMEs and the bank over come this global recession.
Normally SMEs borrowing is for working capital, and the profit should be greater than the cost., in order for the SMEs have the ability to repay the loan. And at this global recession time, most of the stock and assest value come down, if the SMEs purchase the stock and assets last 2years the chances for its stock or assets value come down is high.
For example, if a company purchase a factory which cost him RM500,000 and it pay the deposit of RM 100,000 and the remaining finance it for 25years and at the interest rate of 6%p.a.. and monthly installment at 2577. After repayment for a year the remaining outstanding loan still around RM 392,879. And now it face the difficult time and have the tight cash-flow for the repayment. Moreover the market price of the factory may come down, if we make assumption it come down 10%, the current value of the factory may only at RM 450,000. If it would like to sell it, it may need to find another place to continue the business. If it sell it at market price of RM450,000 after deduct the loan, the company only get around RM 57,121 this excluded any cost of selling the factory. So for this example, if the corporation foresee the business still have the bright future and he just need to over come the recession then the company can make ton of money while the economy boom, the shareholders may consider either to pump-in his own money to the company or borrow more money for the purpose of working capital.
So it real life, if you are the shareholders of the company, would you like to sell the factory and get the money or would you continue to support the company either in term of injecting the capital or support it take loan ?
And if the corporation would like to take loan, which bank dare to borrow it? By the loan schemen provide, this may boost the borrowing. But how effective & efficiency can the banks provide the loan, this is one of the key component?
Time is value for money!
Reference:
1. www.bnm.gov.my
