SMEs take up 50% of guaranteed financing

> However, scheme is still struggling to gain traction among start-ups: Agency

PETALING JAYA: Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP), an agency tasked with according government guarantees for small and medium enterprises’ (SMEs) financing needs, has seen about half of the RM27.2 billion of financing it can dish out taken up.

Since its inception in 2009 SJPP, a Ministry of Finance Incorporated unit managed by Prokhas Sdn Bhd, has guaranteed between 50% and 80% of the RM13 billion financing given out to SMEs. Some RM14.2 billion of these guarantees under three schemes are yet to be taken up.

These are the Services Sector Guarantee Scheme (SSGS), Working Capital Guarantee Scheme (WCGS) Extension Scheme and WCGS Startup Scheme.

The principal officer of SJPP, Dr Nungsari Ahmad Radhi, gave an example of its RM200 million WCGS Startup Scheme, which was rolled out on Jan 1, 2016, and has yet to see traction.

“We hope this can pick up. We are still struggling on how to do the risk assessment. We are still working and feeling our way through with the banks and how to assess the risk to extending in the form of loans to startups,” he explained during the launch of two new schemes, namely, the Automation Process Guarantee Scheme (APGS) and the Intellectual Property Guarantee Scheme (IPGS) yesterday.

An issue, he said, was the 1.5% and 2.5% interest rates imposed by banks for the loans, which are seen as unattractive by SMEs. Nungsari said SJPP hopes financial institutions will consider lowering their interest rate spreads to SMEs as guaranteed by the government. He, however, declined to elaborate.

Another issue, Nungsari said, is the lack of awareness of such schemes among SMEs.

According to SJPP chairman Tan Sri Dr Mohd Irwan Serigar Abdullah, 11,339 SMEs have benefited from the various schemes.

Since 2009, 13,086 applications for financing have been processed. The total number of defaults totalled RM269 million comprising 634 borrowers.

The two new schemes launched are in line with the Budget 2018 allocation, offering guarantees totalling RM2.5 billion worth of financing.

IPGS enables companies to use their intellectual properties as collaterals to gain financing, whereas APGS assists companies intending to embrace automation.

“For the first time we are going to introduce this RM1.5 billion IP-guaranteed business model. This is new and this is guaranteed. My team is also trying to figure out, how to go about doing this and I hope all the banks work together and perhaps work with intermediaries to make this successful,” Irwan said.

Under Budget 2018, more than RM9 billion worth of government guarantees have been allotted by the government under SJPP for SMEs.