KUALA LUMPUR (Aug 21): United Overseas Bank (Malaysia) Bhd (UOB Malaysia) has inked an agreement with Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) to offer government-guaranteed financing to small-and-medium-sized enterprises (SMEs).

SJPP is an administrator and manager of credit guarantee schemes under Malaysia's Ministry of Finance.

Under the agreement, SMEs can obtain collateral-free loans of up to RM1 million through the SJPP-UOB BizMoney financial solution, said UOB and SJPP in a joint statement. The sum is twice what would be available to customers under the existing UOB BizMoney package.

The SJPP-UOB BizMoney financial solution provides flexible repayment tenures of 18, 24, 36, 48 or 60 months, with interest rates starting from 0.54% per month.

"SJPP will guarantee up to 70% of the loan through its Working Capital Guarantee Scheme and Services Sector Guarantee Scheme," the statement read.

The partnership with SJPP will help SMEs gain access to additional financing to capitalise on more business opportunities and to meet their working capital needs, said UOB chief executive officer Wong Kim Choong.

"According to our research, more than half of Malaysian SMEs expect to grow their revenue in 2018. While the majority aim to expand overseas, many also plan to invest in technology infrastructure to help them drive business performance.

"To help businesses capitalise on these opportunities and to help them grow, UOB Malaysia is collaborating with SJPP to provide SMEs the flexibility of obtaining additional working capital without the need for more collateral," said Wong.

Wong said the bank also helps SMEs raise their productivity for business growth. "By providing scalable digital solutions, such as UOB SmartBusiness, we help them streamline and automate their administrative systems and processes," Wong said.

SJPP principal officer Dr Nungsari Ahmad Radhi said the government is committed to providing continuous support to SMEs through various initiatives, products and services.

"We are pleased to work together with financial institutions such as UOB Malaysia to assist and to reach out to as many SMEs as possible. Our low guarantee fees between 0.5% [and] 1%, coupled with the underlying sovereign guarantee, offer SMEs financing at competitive rates," Nungsari said.

"We believe in developing vibrant and healthy SMEs that are integral to Malaysia's economic transformation process," he added.