CGC LAUNCHES REVISED ISLAMIC BANKING GUARANTEE SCHEME
FOR PUBLICATION OR BROADCAST

ON JUNE 2nd 2003

Credit Guarantee Corporation Malaysia Berhad (CGC) today officially announced the revision to its Islamic Banking Guarantee Scheme (IBGS). Datuk Wan Azhar Wan Ahmad, the Managing Director and Chief Executive of CGC says that the revision follows the enhancement to its New Principal Guarantee Scheme (NPGS) which caters for conventional business loans. It is hoped that with the revised IBGS, participating financial institutions will be further encouraged to provide the necessary Islamic Banking financing to Small and Medium scale Enterprises (SMEs) thereby further expanding the overall scope and portfolio of such facilities that are available in the country.

The IBGS, which was first introduced in 1997, is aimed at assisting SMEs that have viable projects but lack the collateral to obtain the required financing from participating financial institutions. The revised IBGS now enables viable businesses to obtain maximum financing of up to RM10 million at a reasonable profit rate imposed by the financier. Eligible businesses are those with an annual sales turnover not exceeding RM25 million or with not more than 150 full time workers.


The IBGS seeks to address the needs of both SMEs and financial institutions with the following features:

A maximum guarantee cover of up to RM2.5 million for the unsecured portion of the financing, applicable to ALL sectors (previously the maximum of RM2.5 million was applicable to the manufacturing sector only). There is no capping imposed on the secured portion.
The guarantee cover is now liberalized and ranges up to 80% for the unsecured portion and 90% for the secured portion and is now applicable to ALL sectors, compared to a fixed guarantee cover structure depending on the sector previously.
The guarantee fee chargeable is only 1.00% (secured portion) and 1.25% (unsecured portion), and is to be paid annually in advance.


The revised IBGS is designed to cater the current needs of SMEs. It is available at all commercial banks and finance companies that have Islamic Banking products. Since its implementation and up to May 24, 2003, the IBGS has benefited 247 borrowers involving loans valued at RM RM153.5 million.

The Corporation is also pleased to announce the achievements of the other guarantee schemes currently in implementation (Cumulative Approved Loans as at May 24, 2003) as follows: -.
CURRENT SCHEMES LOANS APPROVED

NO AMOUNT
(RM million)
New Principal Guarantee Scheme(NGPS) 54,394 16,354.7
Islamic Banking Guarantee Scheme(IBGS) 247 153.5
Direct Access Guarantee Scheme(DAGS) 2,021 844.4
Small Entrepreneur Guarantee Scheme(SEDS) 5,834 205.7
Franchise Financing Scheme(FFS) 102 26.2
Flexi Guarantee Scheme(FGS) 3,770 1,236.4
Other Schemes 271,046 5,079.4.7
TOTAL 337,414 23,900.1

The Corporation in its the role as a “Credit Enhancer” for SMEs is confident that with the revised IBGS, SMEs that prefer Islamic Banking will now be able avail themselves of the necessary financing even though they may have inadequate collateral or track record. CGC will continuously monitor and review its existing products to ensure that Malaysian SMEs continue to have access to the financial support required to further grow and develop their businesses and contribute towards the overall economy.



For any inquiries please contact the Public Relations and Special Programmes Department at 03-7806 2300 ext. 130 or 131.

10-Sep-2009 17:25:56 PM