Financing Schemes in Malaysia for SMEs
Supporting Small Business Throughout the Various Stages of Business Growth
Small and Medium Enterprises (SMEs) are part of Malaysia’s vibrant economy, and there are several financing schemes in Malaysia available to support these SMEs.
Financing Options for SMEs
An SME needs to be nurtured and supported as much as possible. They don’t have as big of a budget to play around with, the way big multinational corporations to. As such, they need assistance to ensure they have the best possible chance of surviving and thriving in this competitive business environment.
SMEs have two options for access to financing in Malaysia. They can either access financing via:
- Ministries and agencies
- Development financial institutions
Soft Loan Financing Schemes in Malaysia
Soft loan financing schemes are provided in Malaysia by the Malaysian Industrial Development Finance Berhad MIDF Agency. The MIDF is part of the Ministry of International Trade and Industry (MITI). There are two options available to choose from:
- Soft Loan for SMEs (SLSME) – This loan is applicable to SMEs in the manufacturing and services sector. Start-ups and SMEs can get the financial assistance they need if they are hoping to improve their productivity, efficiency and competitiveness. With the SLSME soft loan options, SMEs both existing and new are eligible if they need help with capital, projects or fixed assets.
- Soft Loan Schemes for Service Sector (SLSSS) – The SLSSS aims to provide start-up companies with capital and funding they need. The assistance is to help create new services among the entrepreneurs. This loan is applicable to the services sector. Eligible entrepreneurs can apply for this loan if they’re looking to expand, modernise, upgrade and/or diversify their existing services.
Bank Perusahaan Kecil dan Serdahana Malaysia Berhad (SME Bank) Agency is Ready to Help
SME Bank in Malaysia is also ready to assist the entrepreneurs in need. Part of MITI, the SME Bank offers the following options in terms of financing:
- Young Entrepreneur Fund (Services Sector)
- Tabung Usahawan Siswazah (TUS), which is applicable for all sectors.
- Tabung Pembangunan Pengangkutan Awam (TPPA), which is applicable for all sectors too.
MITI also runs another agency, known as the SME Corporation Malaysia (SME Corp. Malaysia) Agency. SME Corp Malaysia also offers financing options for the businesses that need it the most. These options include the following:
- SME Emergency Fund (SMEEF)
- Bumiputera Enterprise Enhancement Programme (BEEP)
These two loans are applicable for all sectors. BEEP is focused on developing the potential of the local Bumiputeras in Malaysia. The eligible SMEs will be supplied with a comprehensive package to assist them with their financial needs. In addition, they will be eligible for advisory assistance too as part of the service.
SMEEF, on the other hand, works a little differently. The focus of this scheme is to assist businesses in any sector that may have been impacted by natural disasters. The financial aid given under this loan will cover consumables, raw material, equipment, machinery and refurbishment costs.
Financial Aid by the Ministry of Finance Malaysia
The Ministry of Finance Malaysia supplies financing schemes in Malaysia through two specific agencies. These agencies are the Malaysian Technology Development Corporation (MTDC) Agency and the Cradle Fund Sdn Bhd (Cradle) Agency. The assistance provided by the MTDC is focused on encouraging and facilitating the growth of entrepreneurs specialising in tech. In addition, the MTDC’s financial aid focuses on helping new start-up companies too.
The Cradle Agency works a little differently. In this scheme, Angel Investors are offered tax incentives in exchange for investing in tech-based start-up businesses in Malaysia.
For more information and the full list of funding options available in Malaysia, click here. Your next business venture could be just a financing scheme away.
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