KUALA LUMPUR (Aug 14): Bank Negara Malaysia (BNM) will transfer its small debt resolution scheme (SDRS) function to the Credit Management Counselling Agency to enable the central bank’s agency to provide more efficient and holistic debt restructuring and advisory services to small and medium enterprises (SMEs) that have loans with multiple banks. 

The Credit Management Counselling Agency is also known as Agensi Kaunseling dan Pengurusan Kredit (AKPK).

In a joint statement today, BNM and AKPK said effective Sept 1, 2020, AKPK will start offering specialised solutions to help SMEs (including micro SMEs) to manage their debt and promote sound financial management practices.

"This follows from the transfer of the SDRS function from BNM to AKPK. With this transfer, AKPK will serve as the one-stop platform for both individuals and SMEs seeking debt restructuring services, as well as financial education and advisory.

"AKPK is well-positioned to take on this function given its vast experience and expertise in assisting financially distressed individuals manage their finances through its structured debt management programme. AKPK also plays a key role in strengthening the financial capability of Malaysians through its tailored financial education and counselling programmes,” BNM and AKPK said.

According to the statement, BNM established the SDRS in 2003 to provide assistance to viable SMEs in all economic sectors that are facing difficulties in servicing their debt with multiple financial institutions, by facilitating the restructuring or rescheduling of loans. 

BNM and AKPK said the SDRS is a platform for financial institutions and SMEs to work out debt rehabilitation solutions amicably and collectively without resorting to legal recourse, allowing SMEs to focus on plans to revive their businesses. 

"Applications referred to the SDRS are assessed objectively by the small debt resolution committee. The committee consists of independent members with expertise in various fields including business and entrepreneurship, development finance and banking. Since 2003, the SDRS has assisted more than 1,200 SMEs to reschedule and restructure their business financing amounting to RM1.7 billion.

"With the automatic moratorium period ending on Sept 30, 2020, SMEs still facing difficulties to service their loan obligations are urged to seek early advice on repayment assistance from their respective banks. The SDRS under AKPK is an additional avenue for SMEs to obtain help and advice on debt restructuring and rescheduling, complementing the efforts of the banking industry to provide relief to distressed SMEs.

"As an agency of Bank Negara Malaysia, AKPK has the bank’s (BNM) full support in delivering its expanded mandate to promote the financial resilience of SMEs and contributing to broader financial stability,” BNM and AKPK said.

Since AKPK's inception in 2006, AKPK has provided counselling services to about 1.1 million individuals, of which 324,815 participants have applied to enrol into the debt management programme, according to BNM and AKPK.

For those that enrolled in the programme, more than 28,000 participants have fully settled their debt amounting to RM1.28 billion in aggregate, according to BNM and AKPK.