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SME Recapitalization Fund Provide Opportunities for SMEs to Receive More Financing Assistance

KUALA LUMPUR : 17 October 2022

SME entrepreneurs can now access the SME Recapitalization Fund worth RM600 million as announced by the Minister of Finance during the 2022 Budget.  As the implementing agency, SME Bank has allocated RM200 million and its partners, TERAJU allocated RM300 million and Bank Simpanan Nasional contributed RM100 million for this SME Recapitalization Fund.

The SME Recapitalization Fund is a part of the Semarak Niaga Program introduced during the 2022 Budget aimed to ensure the growth of SMEs, encouraging business expansion and controlling their level of indebtedness through more innovative financing solutions.

Minister of Entrepreneur and Cooperatives Development, YB Tan Sri Noh Omar said, "As a measure to support the development of these SME entrepreneurs, the Ministry of Entrepreneur and Cooperatives Development (KUSKOP) has also provided fund amounting RM4.0 million ringgit enabling eligible entrepreneurs to participate in the Malaysia Equity Program which is also a requirement to apply for the SME Recapitalization Fund.”

"KUSKOP is targeting up to 650 companies will benefit from this Malaysia Equity Program. The program uses AI technology through the application of the Enterprise Lifecycle Scoring Assessment or ELSA in assessing the companies," commented YB Tan Sri Noh.

Group President/Chief Executive Officer of SME Bank, Datuk Wira (Dr.) Aria Putera Ismail said, "Entrepreneurs who would like to apply for the SME Recapitalization Fund must enroll in the Malaysian Equity Program offered by SME Bank's subsidiary, Center for Entrepreneur Development and Research Sdn. Bhd. (CEDAR). Entrepreneurs will be assessed using the ELSA application to obtain the latest performance reports and then be guided to build a business plan, setting up of company’s KPI and targets. These three documents will allow entrepreneurs to invest in the acquisition of equity shares in a more structured manner."

Datuk Wira Aria added, "This SME Recapitalization Fund offers equity investments of up to RM5 million for qualified entrepreneurs. They can use this investment for working capital needs with a payment period of up to five (5) years with an expected preferential dividend rate of 6% per annum.”

The SME Recapitalization Fund is not classified as a liability, but is considered as the company's shareholding and has no effect on the gearing level if the entrepreneur wishes to apply for another financing. The investment payment is flexible and has the potential to be converted into company shares.

The SME Recapitalization Fund was launched by Dato' Suriani Dato' Ahmad, Secretary General KUSKOP and witnessed by Datuk Wira (Dr.) Aria Putera Ismail, Group President/Chief Executive Officer SME Bank, Jay Khairil Jeremy Abdullah, Chief Executive, Bank Simpanan Nasional and Datuk Dr. Mohammad Hardee Ibrahim, Group Chief Corporate Strategy Officer SME Bank.

SME entrepreneurs who are interested to know more about the SME Recapitalization Fund can reach out to the SME Bank's Customer Service Center at 03-26037700 or visit the official website, www.smerecapfund.com.