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Small to medium-sized businesses (SMEs) are critical economic drivers in a country like Malaysia. In the midst of a pandemic with varying degrees of lockdown protocols, SMEs are struggling. Without steady revenue streams, many SMEs are forced to close their doors or liquidate assets to stay alive. Understanding the financial predicament many SMEs face in these arduous economic times, the Malaysian government’s loan schemes aim to offer respite to struggling SMEs and help them recover.
Depending on the industry, SMEs have a few options as to which loan from the Malaysian government to apply for. It may be a tad confusing which scheme is right for your SME, so we have compiled a helpful cheat sheet for the schemes set up as relief from COVID-19.
Government Guarantee Scheme – Prihatin (GGS – Prihatin)
GGS-Prihatin is one COVID-19 relief scheme aimed at helping SMEs secure financing for new facilities, not existing ones. With a tenure of up to 10 years, this scheme is the broadest and is not limited to specific industries. Funding under this scheme is intended to be used for working capital or capital expenditures, with a minimum funding range of RM75,000 – RM 20 million and a guarantee of 80% by the Malaysian government.
Application for this scheme must be made before 31 December 2020.
Special Relief Facility Scheme (SRF)
The SRF scheme aims to provide short-term cash flow relief for SMEs adversely affected by COVID-19. This shorter-term loan from the Malaysian government is only 5.5 years with a 6-month moratorium period, making it ideal for SMEs who are short on working capital. The SRF scheme is guaranteed at 80% and has an annual interest rate of 3.5%, inclusive of the 0.5% annual guarantee fee.
Application for this scheme must be made before 31 December 2020.
SME Automation and Digitalisation Facility Scheme (ADF)
The ADF scheme targets SMEs who want to improve their operations through digitisation and automation. The need for digitisation and automation has become particularly strong during COVID-19 due to the lack of in-person labour. The goal of the ADF scheme is to incentivise otherwise traditional SMEs to invest in digitisation and automation, offering financing from RM75,000 – RM3 million over a period of up to 10 years. The ADF scheme is guaranteed at 80% and has an annual interest rate of 4.0%, inclusive of the 0.5% annual guarantee fee.
Application for this scheme must be made before 31 December 2020.
Agrofood Facility Scheme (AF)
The AF scheme is solely available to businesses in the agrofood industry intending to grow Malaysia’s food exports. Financing ranges from RM75,000 – RM5 million over a period of up to 8 years, and is to be used as working capital or for capital expenditures and agrofood projects. The ADF scheme is guaranteed at 80% and has an annual interest rate of 3.75%, inclusive of the 0.5% annual guarantee fee.
Application for this scheme must be made before 31 December 2020.
PENJANA Tourism Financing Facility (PTF)
Perhaps no industry has been hit harder than the tourism industry, which is the sole target of the PTF scheme. Businesses across the tourism industry, including hospitality, travel agents, and tour operators, and tourism-adjacent businesses such as medical tourism, money services, and some retailers are eligible for this scheme. Financing ranges from RM75,000 – RM300,000 over a period of up to 7 years with a 6-month moratorium period. SMEs and micro-enterprises can benefit from this scheme, with guaranteed loans from the Malaysian government of 80% and 90%, respectively.
Application for this scheme will continue until the limit of RM1 billion is reached.
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