Through equity and quasi-equity funding initiatives worth RM600 million led by SME Bank in collaboration with Bumiputera Agenda Steering Unit and Bank Simpanan Nasional, Small-medium enterprises (SMEs) can increase their participation in national development activities on a larger scale.
SME Bank said in a statement that it would allocate RM200 million under the IBS Promotion Fund (IBS 2.0) initiative and RM100 million under the Young Entrepreneur Financing (YEF2.0) programme in the post-Covid-19 redevelopment phase to continue assisting the targeted groups in growing their businesses.
Entrepreneur Development and Cooperatives Minister Tan Sri Noh Omar says, “The SME Bank initiative, which was included in the 2022 Budget, demonstrated the importance of the bank’s role as a development financial institution (DFI) that was directly involved in the national development agenda”.
According to SME Bank, “Many SMEs were forced to increase leverage to survive and forge a post-pandemic revival, the long-standing need to strengthen capital structures and reduce reliance on borrowings became more urgent”.
Through the equity and quasi-equity funding programme, SME Bank will provide facilities in the form of equity injection financing with RM600 million in funds and investments of up to RM5 million per SME for up to five years.
Meanwhile, the IBS 2.0 will enable SME Bank to provide financial assistance to eligible contractors, manufacturers, and assemblers in the IBS industry up to the G7 category.
“Working capital requirements, machinery/equipment/factory procurement, and/or factory renovations are all covered, with total financing of up to RM10 million per SME”, it says.
SME Bank will also offer RM100 million in funds under the YEF 2.0 to help and support the development of young SME entrepreneurs aged 21 to 40.
This funding can be used to meet working capital needs as well as the purchase of business assets.
With a profit rate of 5.0 percent per year, the total financing amount is up to RM1 million.
