[This is a sponsored article with Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP).]
As an entrepreneur or startup in Malaysia, you’ve in all probability hit the irritating wall of getting a financial institution mortgage sooner or later. Not as a result of your thought lacks benefit, nevertheless it’s normally because of elements like inadequate collateral and money circulate limitations.
Sadly, this isn’t an remoted incidence.
Whereas SMEs are a vital part of the native economic system and contribute more than a third of Malaysia’s GDP, entry to financing stays a persistent roadblock.
That is the place authorities assure schemes are available in. Nations throughout the globe supply such schemes to companies as an alternative choice to conventional collateral, giving SMEs a fairer shot at securing financing.
Consider them as a security internet that offers banks the wanted confidence to approve a financial institution mortgage, even when younger companies lack the belongings to again it up. In Malaysia, the corporate that gives this help is Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP).
How does a authorities assure scheme truly work?
An entirely-owned firm of the Ministry of Finance, SJPP was established again in 2009 to handle authorities assure schemes. Because the title suggests, the corporate steps in and acts as a guarantor when SMEs don’t have sufficient collateral to get financing from banks.
However don’t mistake SJPP as a monetary establishment that companies borrow cash from (i.e., the “lender”) as a result of it’s not.
For context, collateral refers to belongings with a selected worth {that a} borrower pledges as safety for a mortgage. It ensures the lender can get better their cash if the borrower is unable to repay and likewise reduces the danger of lending to the borrower.
How authorities assure schemes, and on this case SJPP, work is by taking up many of the credit score danger. In actual fact, SJPP supplies authorities assure protection of as much as 90% of the overall mortgage quantity.
Banks danger is minimised, thereby encouraging banks to increase loans that help enterprise development.
Consequently, banks are extra prepared to offer financing extra readily, and in some instances, on extra beneficial phrases.
Right here’s an outline of the steps for simpler digestion:
- Companies submit their mortgage software to a collaborating monetary establishment.
- The monetary establishment evaluates the applying to verify if the mortgage necessities are met, and if it aligns with SJPP’s standards and eligibility.
- If it does align with SJPP’s standards, SJPP supplies the assure protection and the enterprise secures the mortgage.
Presently, SJPP companions with varied monetary establishments, resembling Maybank, RHB Financial institution, CIMB Financial institution, Alliance Financial institution Malaysia, UOB Financial institution, Hong Leong Financial institution, and Financial institution Islam to call a number of.
Boosting up the Malaysian economic system, one mortgage at a time
These efforts transcend serving to simply SMEs. Serving as guarantor for high-risk, high-reward sectors like know-how and inexperienced economic system ensures that Malaysia isn’t left behind in key nation-building industries.
With out ensures in place, many of those companies wouldn’t get the wanted financing to scale up.
There may be additionally the matter of inclusion. The truth is that SMEs in rural areas and women-led firms typically wrestle extra in terms of assembly financial institution necessities. Therefore, SJPP’s position is made much more essential in bridging the monetary hole.
Once you add all these elements up, it’s clear that SJPP doesn’t simply tackle mortgage rejections attributable to inadequate or lack of collateral. Somewhat, it’s quietly transferring Malaysia up the worth chain and nearer to its ambition of turning into a high-income nation.
Thus far, this authorities assure scheme has offered over RM90 billion in credit score financing and supported greater than 100,000 SMEs.
By serving to these companies get financing, they’re capable of increase additional and serve extra folks. Take Berkat OSH Services Sdn Bhd for instance. An occupational healthcare supplier, Berkat OSH Providers initially confronted challenges in securing a enterprise mortgage.
With the help of SJPP’s authorities assure scheme, the corporate was capable of increase by opening extra clinics, recruiting further workers, and buying very important belongings resembling ambulances to raised serve the local people.
Greater than help, it’s a nation-building technique
For Finances 2025, the federal government had allotted RM20 billion to SJPP with the aim of fostering the expansion of round 80% of native companies.
So when you’re operating an SME or have a enterprise prepared for enlargement, don’t let collateral necessities maintain you again. Ask your most popular financial institution about SJPP-backed financing, or be taught extra at its website.
- Study extra about Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) here.
- Learn tales we’re written about Malaysian startups here.
Featured Picture Credit score: Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP)
