RM30mil Available with Government Guarantee Scheme MADANI (GGSM)

In today’s economy, many Malaysian businesses struggle to secure the funding they need to grow. This leaves a lot of small and medium-sized companies in a tough spot. Here’s where the Government Guarantee Scheme MADANI comes in.

These Government Guarantee Schemes help Malaysian businesses get funding without having to put up traditional collateral. Under these schemes, the Government of Malaysia guarantees up to 80% of the credit facilities provided by financial institutions. This initiative significantly reduces the risk for lenders and makes it easier for businesses to secure the necessary funding.

Government Guarantee Scheme MADANI (GGSM) by SJPP

Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP), owned by the Ministry of Finance Incorporated, plays a crucial role in this ecosystem. SJPP bridges the gap between SMEs, MSCs, and financial institutions, including non-banking financial institutions. One of the key schemes offered by SJPP in 2023 is the Government Guarantee Scheme MADANI (GGSM). This comprehensive scheme caters to working capital and capital expenditure needs. It is available to all majority Malaysian-owned companies and businesses across all economic sectors.

Here’s more information about the scheme.

Government Guarantee Scheme MADANI Objective

The Government Guarantee Scheme MADANI (GGSM) aims to provide essential financing assistance to Small and Medium Enterprises (SMEs) and Mid-Size Companies (MSCs). By offering government guarantees to participating Financial Institutions (FIs), GGSM ensures that businesses across all economic sectors can access the necessary funds to grow and thrive. The four focus sectors are:

High Technology
Agriculture
Manufacturing
Tourism

Tenure of Guarantee

The guarantee is valid for up to 10 years or until 31st December 2035, whichever comes first.

Eligibility Criteria for Government Guarantee Scheme MADANI

The scheme is open to all entities (SMEs and MSCs) in all industries with annual revenues not exceeding RM500 million, based on audited accounts or relevant income tax returns for any financial year ending 2019 or later. Eligible entities include:

Sole proprietorships owned by Malaysian citizens
Partnerships and Limited Liability Partnerships controlled and majority-owned by Malaysian citizens
Companies with at least 51% of shares held and controlled by Malaysian citizens

Entities must be duly registered with one of the following:

Companies Commission of Malaysia under the Registration of Business Act (1956) or the Companies Act (1965/2016) or Limited Liability Partnership Act (2012)
Respective authorities or district offices in Sabah and Sarawak
Respective statutory bodies for professional service providers

Exclusions

Entities publicly listed on the main board
Government-linked companies (GLCs)
Syarikat Menteri Kewangan Di Perbadankan (MKDs)
State-owned enterprises
Subsidiaries with at least 51% shares of the entities mentioned above
Civil servants currently in service, except with prior written approval from the employer

Government Guarantee Scheme MADANI Financing Information

The scheme provides financing for:

Working Capital
Capital Expenditure (CAPEX)

*Note: The facility is intended for new financing and cannot be used to refinance existing facilities granted by the same or other FIs.

The GGSM offers various types of facilities, including:

Term Loan/ Term Financing-i
Overdraft/ Cash Line-i
Revolving Credit/ Revolving Facility-i
Trade/ Trade-i Facility

Financing Limit

Up to RM30 million per company for the High Technology, Agriculture, Manufacturing, and Tourism sectors.
Up to RM20 million per company for all other sectors.

*Note: The aggregate Group Limit for all other schemes under SJPP, including this scheme, must not exceed RM50 million.

Government Guarantee Scheme MADANI Coverage and Fee

Up to 90% guarantee for financing obtained from participating FIs (including principal and interest/profit) for the four focus sectors, with a financing limit capped at RM10 million per company.
Up to 80% guarantee for all other sectors.

BNM funding schemes: 0.5% per annum, payable upfront
Four focus sectors: 0.75% per annum, payable upfront
Other sectors: 1.0% per annum, payable upfront

Interest/ Profit Rate

Not exceeding FI’s BLR/BFR + 2%

Application Period

Applications for the GGSM are open until 31st December 2024.

Application Process

1. SMEs to Apply for Financing Facilities from Participating FIs

SMEs must approach participating Financial Institutions (FIs) to apply for the necessary financing facilities. It is important to note that SJPP does not provide any direct financing or credit facilities.

2. FIs to Review Credit Applications

The FIs will conduct an initial review of the credit applications submitted by the SMEs. If the SMEs lack sufficient collateral, the FIs will then submit the scheme applications to SJPP directly.

3. SJPP to Review Scheme Applications for Approval

SJPP will thoroughly review the scheme applications submitted by the FIs for approval. Any further conditions or requirements will be communicated to the FIs, who will then relay this information to the SMEs. Up to 1% guarantee fee will be applied for the guarantee coverage provided by SJPP.

Looking to advance your business? Check out SJPP’s financing guarantees on their website now!