Agrobank And SJPP Inks Agreement To Assist Entrepreneurs Recover Amid COVID-19 Pandemic Under The Keluarga Malaysia Guarantee Scheme

KUALA LUMPUR – Agrobank and Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) inked an agreement to assist Malaysian Small and Medium Enterprises (SMEs) and Mid-Sized Companies (MSCs) to recover and emerge stronger during the current economic recovery phase under the Keluarga Malaysia Government Guarantee Scheme.

President/Chief Executive Officer of Agrobank, Tengku Ahmad Badli Shah Raja Hussin, said, the financing scheme will be made available to a wider target market of Malaysian SMEs and MSCs with annual revenue of not more than RM250 million.

“The scheme is the pursuant to the PEMULIH Assistance Package announced on 28 June 2021 with the allocation of RM20 billion Government Guarantee under the PEMULIH Government Guarantee Scheme (PGGS). It has commenced and available to assist entrepreneurs that may require adequate cash flow to recover and move forward in their businesses amid the COVID-19 pandemic in this current economic recovery phase.

 “The SMEs and MSCs that are in need of assistance, may apply and utilise the facility for new/or additional working capital and/or capital expenditure (CAPEX) to purchase necessary equipment to improve their business landscape,” he said this after the signing ceremony of the ‘Letter of Offer’ between Agrobank and SJPP held recently.

The Letter of Offer was signed by Chief Operations Officer of Agrobank, Zahid Ahmad Zawawi and Chief Operating Officer of SJPP, Juanita Rusmini Abdul Jalil, witnessed by Tengku Ahmad Badli Shah and Principal Officer of SJPP, Chen Yin Heng, along with the senior management delegation team from Agrobank and SJPP.

According to Tengku Ahmad Badli Shah, the partnership between Agrobank and SJPP is timely with the bank’s direction in 2022 to focus on facilitating the economic recovery among the business owners and nourish the agriculture sector in Malaysia.

He said, the collaboration between Agrobank and SJPP in assisting SMEs to gain access to financing are mainly for companies involved in agriculture-based industries. It is timely as the agriculture sector or more precisely the agro-food sector continues to be one of the important growth engines for the national economy. The outlook for the agriculture sector for the next decade appears promising despite global challenges such as climate change, a growing population and scarcity of resources.

“The unique features included in the scheme is intended for more Malaysian SMEs and MSCs to be able to reap the benefit of the government assistance, recover from the revenue shock and dwindling cash reserves arising from the COVID-19 pandemic. The financial facility, however, cannot be used to refinance existing facility granted by the same or other participating FIs.”

“This facility will be available up to 31 December 2022 and it will be beneficial for start-up companies with at least six (6) months operation to less than three years,” he further commented.

The type of financing that is applicable under the KMGGS through this partnership is the Term Financing-i, Agro Cash Line-i, Trade Facility-i and Modal Kerja-i. For more information on this initiative, please visit Agrobank website at www.agrobank.com.my or contact customer service at 1300 88 2476 or visit Agrobank branches.

Meanwhile, SJPP Principal Officer, Chen Yin Heng said that the government, via SJPP is committed in providing continuous support to SMEs as well as the MSCs through various initiatives, including the allocation of RM20 billion Government Guarantee which is under the PEMULIH Government Guarantee Scheme.

“This will assist eligible SMEs and MSCs to obtain much needed additional financing, restructuring of existing loans and/or additional working capital to support them in their business recovery and to reduce their financial burden,” said Chen.

In addition, a further allocation of RM10 billion Government Guarantee (including RM2 billion for Bumiputera) was also announced in Budget 2022, thus enhancing PGGS limit from RM20 billion to RM30 billion for both SMEs and MSCs.

Among the enhanced key features and benefits of PGGS are:

• Open to SMEs and MSCs in all industries with annual revenue of not more than RM500 million based on their audited accounts or income tax returns (previously it was RM250 million).
• Guarantee cover of 80% by the government for new financing facilities as well as the restructuring of existing financing facilities with further funding of working capital for these SMEs and MSCs to revitalise their business.
• 12 months moratorium and minimum of 3 years of extended tenure to reduce the financial burden of companies affected by the COVID-19 pandemic.

Chen said SJPP was pleased to work together with Agrobank as one of the prominent DFIs to assist both SMEs and MSCs. SJPP is allocating RM800million under PGGS for financing facilities for AgroBank’s customers.

“Our guaranteed fee of between 0.75% to 1.0% per annum, coupled with the underlying Government Guarantee would offer the companies competitive rates of financing by the FIs of up to RM20 million,” he added.

Government Guarantee Schemes that were established by the Government and managed by SJPP has been vastly utilised by many SMEs in all industries such as in manufacturing, services, retail and trade. To date, more than RM47.0 billion guarantees have been provided to over 45,000 SMEs and the allocation has helped them tremendously to sustain their businesses especially during the COVID-19 pandemic, as well as providing them with some financial reserves for their working capital needs in this economic recovery period.

“We at SJPP believe in developing vibrant and healthy SMEs and MSCs that play an important role in our country’s economic transformation process thus we are working closely with the participating financial institutions to support the Government’s initiatives via various guarantee schemes under SJPP,” said Chen.

For more information on PGGS or other government guarantee schemes, please visit SJPP’s website at www.sjpp.com.my.