Development Financial Institutions
CREDIT GUARANTEE CORPORATION MALAYSIA BERHAD (CGC)
Credit Guarantee Corporation Malaysia Berhad (CGC) was established on 5 July 1972 with Bank Negara Malaysia and all the commercial banks as its shareholders. The objectives of CGC is to assist Small & Medium scale Enterprises particularly those without collateral or with inadequate collateral to obtain credit facilities from financial institutions by providing guarantee cover on such facilities.
In line with the Government's effort to assist SMIs which form the base for industrial development, CGC is now classified as a Development Financial Institution. Currently CGC offers nine types of guarantee schemes:
1. Direct Access Guarantee Scheme (DAGS)
2. Direct Access Guarantee Scheme Islamic (DAGS-i)
3. Flexi Guarantee Scheme (FGS)
4. Islamic Banking Guarantee Scheme (IBGS)
5. Franchise Financing Scheme (FFS)
6. Credit Enhancer Guarantee Scheme (SEGS) (Enhancer)
7. Small Entrepreneur Guarantee Scheme (SEGS)
8. Direct BG
9. DAGS ¨C Start Ups
The above various guarantee schemes will be satisfied different scales and different levels of SMIs. Such as the small scale business may apply Small Entrepreneur Guarantee Scheme (SEGS), the franchisee may apply Franchise Financing Scheme (FFS).
MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BERHAD (MIDF)
Malaysian Industrial Development Finance Berhad (MIDF) is the first and only development finance institution (DFI) in the country listed on the Kuala Lumpur Stock Exchange. Incorporated on 20 March 1960, MIDF was established with the objective to promote the development of the manufacturing industry in Malaysia through the provision of medium and long-term loans. The provisions include financing of new fixed assets for new industrial ventures as well as existing enterprises undertaking modernization, expansion and/or relocation.
MIDF have a pool of personnel who are experienced and knowledgeable in the financing for start-up companies and operations of manufacturing businesses in the country. Combining financial strength with valuable experience and expertise, MIDF is the leading institution in providing fixed assets financing to manufacturers in Malaysia. Over the years, MIDF has enjoyed the benefit of being one of the DFIs designated by the Government to manage and disburse funds under various special loan schemes.
Soft Loan for SMEs
The fund which was introduced in December 2001 is aimed at promoting the development of small and medium enterprises in Malaysia. This scheme provides assistance to existing as well as new start-up companies in project, fixed assets and working capital financing.
The scheme is channeled from the Government through the Small and Medium Industries Development Corporation (SMIDEC) and implemented by Malaysian Industrial Development Finance Berhad (MIDF).
1. SMEs incorporated under the Companies Act 1965 OR Registration of Business Act 1956.
2. At least 60% equity held by Malaysians.
3. Subsidiaries of public-listed companies with shareholding not exceeding 20%
4. Possess valid premises license.
5. Manufacturing, Manufacturing Related Services & Services (excluding insurance and financial services)
LOAN SIZE & ELIGIBLE EXPENSES:
1. Minimum: RM 50,000.
2. Maximum: RM 3 million.
3. Project, fixed assets and working capital financing.
4. Cost incurred for initial store renovation and upgrade of store display for retail trade;
5. Working capital for companies with comfirmed contract from GLCs, MNCs, and the Government including its agencies.
PERCENTAGE OF FINANCING:
(i) Up to 90% of the cost for new assets. Up to 65% for used / reconditioned equipment which shall not be more than 5 years old.
(ii) Up to 90% of the working capital requirements (for revolving credit and factoring).
1. Land and Building - Up to 15 years including grace period of up to 2 years.
2. Machinery and Equipment - Up to 6 years including grace period of up to 1 years.
3. IT Equipment - Up to 4 years including grace period of up to 1 year.
4. Term Working Capital - Up to 3 1/2 years including grace period of up to 6 months.
5. Revolving Working Capital - Subject to annual review.
2.0% per annum on yearly rest
SMALL AND MEDIUM INDUSTRIES DEVELOPMENT CORPORATION (SMIDEC)
The Small and Medium Industries Development Corporation (SMIDEC) was established on 2nd May 1996. The establishment of SMIDEC was in recognition of the need for a specialised agency to further promote the development of Small and Medium Industries (SMIs) in the manufacturing sector through the provision of advisory services, financial assistance and other support programmes.
Incentives provided by Small & Medium Industries Development Corporation (SMIDEC) in the form of grants and soft loans as follow:
- Matching Grant for Business Start-ups
- Matching Grant for Product and Process Improvement
- Matching Grant for Certification and Quality Management System
- Matching Grant for Enhancing Product Packaging
- Matching Grant for Development and Promotion of Halal Product
- Grant for RossettaNet
- Grant - Loan facility
- Grant for Enhancing Marketing Skills of SMEs
- Soft Loan Scheme For Factory Relocation
- Soft Loan For SMEs
- Soft Loan For ICT Adoption
Bank Perusahaan Kecil & Sederhana Berhad (SME Bank)
The SME Bank - or Bank Perusahaan Kecil & Sederhana Malaysia Berhad - started its new function on 3 October 2005 as a development financial institution to nurture and meet the unique needs of small and medium enterprises (SMEs).
As a one-stop financial centre responding to the funding and business growth needs of Malaysian SMEs, the bank complements existing products and services offered by commercial banks through a comprehensive and integrated financial and business advisory services. Its primary role is to contribute towards the growth of a more robust entrepreneurial community in Malaysia.
For further details on SME Bank, please log on to the Advisory Centre at http://www.smebank.com.my/advisory_centre.asp
The Bank operates through its head office in Kuala Lumpur and 19 branches nationwide.
For further information on CGC, MIDF, SMIDEC and SME Bank, please contact:
Credit Guarantee Corporation Malaysia Berhad (CGC)
Tel: 03-78062300 or 082-424200
Malaysian Industrial Development Finance Berhad (MIDF)
Tel: 03-21738888 or 082-254533
Small and Medium Industries Development Corporation (SMIDEC)
Tel: 03-62076000 or 082-252955
Tel : 03-26152020 or 082-259955 or 085-418448
Mr. Chiou Huey Ping, Vice-President of SMA
Tel: 082-254932 or H/P: 012-2170677
Source: Website of CGC, MIDF, SMIDEC & SME Bank