3 SME loans from Budget 2022, with interest as low as 0%

If you’re a business owner, the past two years must feel like being punched in the gut by an MMA fighter. We should know, we’re still walking slightly senget… which is better than a lot of others since, as of July this year, at least 150K SMEs had to gulung tikar due to financial woes. But like us, many more are now hanging on by a thread.

Fortunately, there is an assortment of government aids in the recently announced Budget 2022 aimed specifically at helping SMEs out, and we’ll be highlighting a few that we think would be the most compelling.

Bear in mind though, they’re meant to only take effect in 2022 (sebab Budget 2022 la kan) so the eligibility criteria and application processes aren’t fully released yet. We’ll update this article as those come along.

1. SemarakNiaga loans have interest rates as low as 0%

Here’s a problem SMEs face when they need a cash injection the most – plenty of red tape, high interest rates, and no certainty of an approval from a bank because you’re now considered a high risk borrower. And because of this, many entrepreneurs end up borrowing from friends and family at best, and from illegal loan sharks at worst.

Well, with the upcoming SemarakNiaga scheme, businesspeople can get microcredit loans with initial interest rates as low as 0%, a moratorium of 6-12 months, AND easy approval to boot!

You’ll be able to apply for these loans next year through appointed agencies like TEKUN, BSN and Agrobank. The maximum loan amount and subsequent interest rate varies between agencies. Some have a higher maximum loan amount with up to 4% interest rate; and others have a lower loan amount at 0% interest. For example:

Skim Pinjaman Informal dan Mikro (SPIM) by TEKUN:

• • Maximum loan amount: RM10,000
  • Interest rate: 0%
  • Moratorium given: 12 months
  • Tenure: up to 5 years (including moratorium)

Agrobank microcredit schemes:

• • Maximum loan amount: RM75,000
  • Interest rate: 0% for the first 6 months, and 3% afterwards
  • Moratorium given: 6 months
  • Tenure: up to 5 years

BSN microcredit schemes:

• • Maximum loan amount: RM75,000
  • Interest rate: 0% for the first 6 months, and 4% afterwards
  • Moratorium given: 6 months
  • Tenure: up to 5 years

What’s also super cool is that there are also alternative financing methods like equity crowdfunding and peer-to-peer financing! More details on this soon though.

But if you’re already in dire need of funding now and can’t afford to wait until 2022, here are links to other microcredit schemes available in 2021 (though the terms are different from the ones we mentioned above la):

• PEMERKASA BSN: Up to RM50k loan, 3% interest rate
• Various Agrobank C-19 relief measures: Loan from RM1k up to RM150k, interest rates from 0% up to 7%
• Skim Pembiayaan TEKUN Niaga: Up to RM100k loan, interest rate up to 4%

2. iTekad brings a loan AND business training

While iTekad is technically bundled under the SemarakNiaga series of schemes, we felt that it deserves mention because the way it works is fairly distinct from the microcredit loans we mentioned earlier.

First launched in May 2020, iTekad harnesses funds from social finance instruments (a fancy way to say social tabung) like Zakat to offer as loans to micro-entrepreneurs. However, this will only apply to those in the B40 economic group and asnaf micro-entrepreneurs (people who are eligible for Zakat aid). In short, the idea remains the same; give a cash injection to businesspeople who really need it, and lessen the financial burden of  buying equipment for their business.

However, eligible applicants will also receive structured entrepreneurship and financial management training to help them make their businesses more sustainable and resilient in the long term, kinda like the whole teach a man to fish thing.

The maximum loan amount available for applicants is RM50K, with an interest rate of 4% per annum, and businesses must have a yearly income under RM300,000 and less than 5 full time workers to be eligible.

3. Up to RM50k loan for self-employed and gig workers

Bank Negara Malaysia (BNM) will also be offering loans to micro-entrepreneurs which include the self-employed, gig workers on digital platforms, and eligible participants of the iTekad programme mentioned above. The main selling point of their Micro Enterprises Facility (MEF) is that there’s zero collateral, meaning you don’t have to use your house, car or grandma (just kidding) as a loan guarantee.

Just like the other schemes, businesspeople can apply for the MEF from various financial institutions listed below, with the caveat that different banks will have different interest rates. The maximum loan amount remains the same across the board: RM50K for working capital or capital expenditure.

Participating Financial Institutions for Micro Enterprises Facility (MEF):
1. AmBank (M) Berhad
2. Alliance Bank Malaysia Berhad
3. Bank Islam Malaysia Berhad
4. Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat)
5. Bank Muamalat Malaysia Berhad
6. Bank Pertanian Malaysia Berhad (Agrobank)
7. Bank Simpanan Nasional
8. CIMB Bank Berhad
9. Malayan Banking Berhad
10. Public Bank Berhad
11. United Overseas Bank (Malaysia) Berhad

Just a note though, the loan from this programme must be used for business and not to refinance or pay off any existing loans you already have.

Government help for SMEs aren’t limited to just loans

Of course, the loan schemes we’ve talked about aren’t the only ones SMEs can take advantage of; there are numerous others like the SME Automation and Digitalization Facility with loans up to RM3 million, Agrobank’s agrofood financing programmes of up to RM500k, SME Bank Young Entrepreneur Fund 2.0 with loans up to RM1 million… it really depends on what kind of assistance your business needs.

Outside of the loans, there are also tax reliefs and subsidies that SMEs and individuals can make use of. It’s never a shameful thing if you need a hand – everyone’s been in a pickle at least once in their lifetime – so yeah, head over to the Manfaat Bajet 2022 website to check out whatever scheme fits your bill…. or y’know… pays off your bill.