How SJPP makes enterprise financial institution loans accessible to M’sian SMEs

[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 in some unspecified time in the future. Not as a result of your thought lacks benefit, but it surely’s often resulting from components like inadequate collateral and money move limitations.

Sadly, this isn’t an remoted incidence.

Whereas SMEs are a vital part of the native economic system and contribute greater than a 3rd 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 a substitute for conventional collateral, giving SMEs a fairer shot at securing financing.

Consider them as a security internet that provides 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 really work?

An entirely-owned firm of the Ministry of Finance, SJPP was established again in 2009 to handle authorities assure schemes. Because the identify 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 particular worth {that a} borrower pledges as safety for a mortgage. It ensures the lender can recuperate their cash if the borrower is unable to repay and in addition reduces the chance of lending to the borrower.

How authorities assure schemes, and on this case SJPP, work is by taking up many of the credit score threat. In actual fact, SJPP supplies authorities assure protection of as much as 90% of the whole mortgage quantity.

Banks threat is minimised, thereby encouraging banks to increase loans that help enterprise progress. 

Consequently, banks are extra prepared to supply financing extra readily, and in some circumstances, on extra beneficial phrases.

Right here’s an outline of the steps for simpler digestion:

1. Companies submit their mortgage software to a taking part monetary establishment.
2. The monetary establishment evaluates the applying to verify if the mortgage necessities are met, and if it aligns with SJPP’s standards and eligibility.
3. 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, comparable to 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 couple 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’s additionally the matter of inclusion. The fact is that SMEs in rural areas and women-led corporations usually battle extra on the subject of assembly financial institution necessities. Therefore, SJPP’s position is made much more essential in bridging the monetary hole.

Whenever you add all these components up, it’s clear that SJPP doesn’t simply tackle mortgage rejections attributable to inadequate or lack of collateral. Quite, 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 supplied over RM90 billion in credit score financing and supported greater than 100,000 SMEs.

By serving to these companies get financing, they’re in a position to develop additional and serve extra folks. Take Berkat OSH Providers 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 in a position to develop by opening extra clinics, recruiting extra workers, and buying important belongings comparable to ambulances to raised serve the area people.

Greater than help, it’s a nation-building technique

For Finances 2025, the federal government had allotted RM20 billion to SJPP with the purpose of fostering the expansion of round 80% of native companies.

So should 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 web site.

• Study extra about Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) right here.
• Learn tales we’re written about Malaysian startups right here.

Featured Picture Credit score: Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP)