SME Bank successfully raises funds despite Covid-19 and MCO

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SME Bank’s RM500 million-Government Guaranteed Islamic Medium Term Notes (IMTN) were oversubscribed 4.5 times, attracting RM2.2 billion in interest as of April 16.

In a press statement released by SME Bank, its group president and CEO Aria Putera Ismail said the interest was primarily from financial institutions and asset management companies. “Despite the economic uncertainty and rapid fluctuations of the money market, the negotiations were closed at 23 basis points for 5 years and 20 basis points for 7 years, respectively.”

He adds that the IMTN has been set at a competitive final price of between 3.02% and 3.3%.

The bank, which comes under the supervision of the Ministry of Entrepreneur Development and Cooperatives, said it has been quick in responding to the current situation by implementing a few initiatives to help support the viability of the SME sector during this Covid-19 crisis, in line with the government’s second economic stimulus package.

It has already taken several initiatives such as the automatic deferment of financing payments as well as rentals by tenants of factory lots at its Entrepreneur Premises Complex. 

In addition, SME Bank is also offering a number of financing packages under Bank Negara Malaysia’s Special Relief Facility, Automation and Digitalisation Facility, Agrofood Facility and All Economic Sectors Facility. 

These efforts are aimed at helping SMEs better manage their cash flow and prepare for the challenges of rebuilding their businesses once the crisis ends.

The bank is not only providing financial support but moral and instructional support as well. Its wholly owned subsidiary, The Centre for Entrepreneur Development and Research Sdn Bhd (Cedar), is sharing tips online to help entrepreneurs reassess their current business models and make the necessary adjustments. 

In addition, Cedar is continuing its entrepreneurship training programmes online and over social media platforms. Since it was established in 2013, Cedar has trained more than 43,000 entrepreneurs through various entrepreneurship development programmes.

SME Bank has approved RM32 billion in financing to more than 17,200 SME entrepreneurs as of Dec 31, 2019. It has also been charged by the government to spearhead the National SME Digital Platform.

So far, it has launched two digital initiatives under the National SME Digital Platform, ScoreXcess and Odela.

ScoreXcess (https://www.scorexcess.my) is a portal that processes micro financing applications and runs the pre-approval process before the applications are submitted to participating financial agencies. It was launched on Sept 30 last year. As of April 1, it has received 851 applications for RM12.5 million worth of financing and redirected them to participating financing agencies to be processed.

Odela, an e-commerce platform, was launched last December, facilitates business-to-business (B2B) transactions so they are more systematic and informative. SME Bank aims to record RM9.8 billion in transactions through Odela over a five-year period. As of April 7, the platform has recorded RM355,000 in transactions.