ABM: Financing readily available for SMEs affected by COVID-19

ABM: Financing readily available for SMEs affected by COVID-19
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KUALA LUMPUR (April 8): Amid the COVID-19 pandemic, banks will remain supportive towards small and medium enterprises (SMEs) in terms of financing, said the Association of Banks in Malaysia (ABM).

“Financing from ABM member banks is readily available to eligible borrowers,” ABM said in a statement today. “Our member banks are playing a vital role to provide access to financing, especially to viable businesses that have been adversely affected by the outbreak of COVID-19.”

On March 27, Bank Negara Malaysia (BNM) announced that it would be increasing the allocation to BNM’s Fund for SMEs by RM4 billion, bringing the total allocation to RM13.1 billion.

“This fund, which is aimed at providing assistance to more SMEs in sustaining business operations and preserving jobs as well as to support economic growth, will be made available to the SME segment via the participating financial institutions,” said ABM, adding that interested SMEs should contact the participating banks to apply for the financing available under the facilities announced by the Central Bank.

As at April 2, financial institutions have approved about 1,300 applications under the Special Relief Facility, Agrofood Facility and Automation and Digitalisation Facility of BNM’s Fund for SMEs, totalling RM682 million.

This is on top of the other financing provided to SMEs by the banks under their own financing schemes, totaling RM42 billion in the first two months of the year.

As SMEs play a vital role in the Malaysian economy and are considered the backbone of the industrial development of the country, ABM said member banks are cognizant of the importance of business continuity for this segment and are ready to assist and provide access to financing for eligible SME borrowers.

“In light of the current Movement Control Order (MCO), our member banks are still processing loan applications, though remotely, and accordingly there may be longer processing times for loan applications,” the association said.

SMEs can also get in touch with Credit Guarantee Corp Malaysia Bhd (CGC) via their imSME.com.my portal to explore the various financing initiatives they may offer for SMEs, said ABM.

Meanwhile, SMEs whose loan applications are not approved are advised to seek guidance and assistance from Khidmat Nasihat Pembiayaan (MyKNP), which is an initiative by BNM to assist individuals and SMEs on how to improve their eligibility for financing.

SMEs are also advised to consider alternative sources of funding such as the Malaysia Co-Investment Fund scheme (MyCIF) that offers funding via equity crowdfunding (ECF) and/or peer-to-peer financing (P2P), said ABM.