Flexi Guarantee Scheme (FGS)

Objective

Flexi Guarantee Scheme (FGS) provides guarantee for financing granted under BNM’s Funds for SME-All Economic Sectors Facility.

The funds are designed to facilitate greater access to financing for viable Malaysian Small and Medium Enterprises (SMEs).

Main Characteristic

Among the main characteristics of the FGS are:

  • Guarantee cover ranging from 30% – 80% as required by participating financial institutions.
    • Annual guarantee fee, calculated based on the guarantee cover issued and payable in advance. Fees will be borne by the participating financial institutions.
    • Secured Portion     :-Between 0.50% and 1.85% per annum.
    • Unsecured Portion:-Between 0.80% and 2.15% per annum.
  1. i) Payment of Guarantee Fee.
  • New Letter of Guarantee (LG) – Payable upon request for LG by Financial Institution (FI).
  • Anniversary LG – Payable on or before LG anniversary date.
  1. ii) Refund of Guarantee Fee
  • Refund of guarantee fee will be pro-rated on a monthly basis. The utilised period is calculated from the month of LG/Anniversary LG until the month of cancellation/amendment.
  • The refund of guarantee fee on a pro-rated basis is applicable for LGs that are cancelled or amended by CGC commencing 2nd Jan 2013 onwards.

Application Procedures

The financing application is made through any participating financial institutions. Approval will be subjected to normal vetting procedures and security requirements of the participating financial institutions.

All Economic Sectors Facility

Purpose of Financing

  • Capital expenditures; or/and
  • Working capital

Financing should not be used for:

  • Purchase of shares;
  • Refinancing of existing credit/financing facilities;
  • Purchase of land/real estate investment;
  • Property development;
  • Investment by investment holding companies;
  • Activities where the stock in trade is money (including credit, leasing, factoring and insurance businesses);
  • Gambling, alcohol, tobacco or other similar type of activities and products; and
  • Non-Shariah compliant business activities (applicable for Islamic financing).

Eligibility Criteria

  • Meet the SME Corporation Malaysia’s definition of an SME (for details, please click here)
  • Business is registered with the Companies Commission of Malaysia (SSM); or authorities/district offices in Sabah and Sarawak; or statutory bodies for professional service providers;
  • Shareholding by Public Listed Companies and Government Linked Companies (if any) in the SMEs shall not exceed 20%;
  • Malaysians residing in Malaysia hold a minimum of 51% shareholding in the SMEs.

Maximum Financing Rate : 5.00% to 7.00% per annum
Maximum Tenure : Up to 5 years
Minimum Financing  : No minimum amount
Maximum Financing : RM5 million per SME. Related SMEs with common shareholder(s) to have separate limits on the maximum amount of financing under BNM’s Fund for SMEs, subject to each SME having separate workforces.

Participating Financial Institutions (PFIs)

Applicable to all PFIs defined as follows:-

  • All licensed banks under the Financial Services Act 2013 (FSA);
  • All licensed Islamic banks under the Islamic Financial Services Act 2013 (IFSA);
  • All prescribed development financial institutions under the Development Financial Institutions Act 2002 (DFIA)