Malaysia’s Central Bank Provides Financing Facility for High-Tech SMEs

Posted by Written by Ayman Falak Medina Reading Time: 3 minutes

Malaysia’s Central Bank has established a 1 billion ringgit (US$241 million) financing facility to support high-tech and innovation-driven small and medium-sized enterprises impacted by the pandemic.

Malaysia’s Central Bank (Bank Negara Malaysia (BNM)) has established a 1 billion ringgit (US$241 million) financing facility — the High Tech Facility – National Investment Aspirations (HTF-NIA) — to support local high-tech and innovation-driven small and medium-sized enterprises impacted by the pandemic.

What are the financing facilities available?

Eligible companies can receive up to 1 million ringgit (US$241,000) as working capital and up to 5 million ringgit (US$1.2 million) for capital expenditure (CAPEX). HTF-NIA is available until December 31, 2021, or until the funding has been fully utilized (whichever comes first).

SMEs that are not eligible for the HTF-NIA can apply for other financing facilities from BNM, such as the SME Automation and Digitalization Facility (ADF). Under this scheme, businesses can receive up to 3 million ringgit (US$725,000) for the purchase of equipment and software that accelerates the automation and digitalization of business operations.

Who qualifies for HTF-NIA?

Eligible SMEs engaged in advanced manufacturing and services sectors that are aligned with the long-term goals embedded in the National Investment Aspirations (NIA) plan, or SMEs participating in key government projects like the development of critical technologies, will qualify for HTF-NIA.

NIA is Malaysia’s overarching strategic developmental plan to increase economic complexity, create high-value jobs, and strengthen Malaysia’s position in the global value chains.  

Examples of subsectors within the manufacturing and service sectors with high NIA scores are:

  • Electrical and electronics (E&E);
  • Chemicals (including pharmaceuticals and refined petroleum);
  • Medical equipment and optical scientific equipment;
  • Machinery such as robotics, drones, and industry 4.0 technologies;
  • Transport equipment for aerospace, vehicle, and parts manufacturing, as well as for green technologies;
  • Information and communication technology (ICT); and
  • Research and development services.

Examples of the key government projects include:

  • The Global Acceleration and Innovation Network (GAIN);
  • National Technology and Innovation Sandbox (NTIS) and Research and Development Fund;
  • MIDA’s Domestic Investment Strategic Fund recipients engaged in R&D activities or licensing/purchasing of new technologies; and
  • MIDA’s i-services provider list comprising of SMEs involved in R&D, engineering, green technology services, system integration, and ICT service.

What are the maximum financing amount and tenure available?

Up to 1 million ringgit (US$241,000) per SME is available for working capital or 5 million ringgit (US$1.2 million) per SME for financing CAPEX or a combination of working capital and CAPEX, for a tenure of up to 7 years.

The facility is offered at a financing rate of up to 3.5 percent per annum for financing without guarantee or up to five percent per annum inclusive of guarantee.

Which banks can SMEs apply to for financing under HTF-NIA?

SMEs are advised to contact the 20 participating financial institutions (PFI) to ascertain whether they are eligible for HTF-NIA financing.

If there are any guarantee coverage, then it can be provided by Credit Guarantee Corporation Malaysia (CGC). However, where applicable, this guarantee fee would already be included in the financing rate charged to the customers, which could be up to 5 percent per annum.

The participating PFIs are:

  1. Affin Bank Berhad / Affin Islamic Bank Berhad;
  2. Alliance Bank Malaysia Berhad / Alliance Islamic Bank Berhad;
  3. Ambank (M) Berhad / AmBank Islamic Berhad;
  4. Bangkok Bank Berhad;
  5. Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat);
  6. Bank Muamalat Malaysia Berhad;
  7. Bank of China (Malaysia) Berhad;
  8. Bank Pertanian Malaysia Berhad (Agrobank);
  9. CIMB Bank Berhad / CIMB Islamic Bank Berhad;
  10. Export-Import Bank of Malaysia Berhad (EXIM Bank);
  11. HSBC Bank Malaysia Berhad / HSBC Amanah Malaysia Berhad;
  12. Hong Leong Bank Berhad / Hong Leong Islamic Bank Berhad;
  13. Malayan Banking Berhad / Maybank Islamic Berhad;
  14. MBSB Bank Berhad;
  15. OCBC Bank (Malaysia) Berhad / OCBC Al-Amin Bank Berhad;
  16. Public Bank Berhad / Public Islamic Bank Berhad;
  17. RHB Bank Berhad / RHB Islamic Bank Berhad;
  18. Small Medium Enterprise Development Bank Berhad (SME Bank);
  19. Standard Chartered Bank Malaysia Berhad; and
  20. United Overseas Bank (Malaysia) Berhad.

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