RM1.1 billion interest-free loan for SMEs

Datuk Patinggi Abang Johari Tun Openg

KUCHING: The State government has allocated RM1.1 billion in interest-free loan to small medium enterprises (SMEs), in its effort to cushion the effect of the movement control order (MCO) on the economy.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the move will benefit some 40,000 SMEs in the state.

“In collaboration with Maybank Bank, Hong Leong Bank and RHB Bank, under the Bank Negara Malaysia (BNM) Special Relief Fund (SRF), Sarawak government agreed to  absorb the interest costs on the loans due to be released to our SMEs.

“The interest-free loans of RM1.1 billion will be made available for our SMEs. The financial implication for the interest rates subsidy over the three and a half years is RM80.7 million,” he said in press conference to announce the second Sarawakku Sayang assistance package on Friday.

Abang Johari said SMEs can apply for the loans directly from any branches of either Maybank Bank, Hong Leong Bank or RHB Bank with the option to apply for either Islamic or conventional loans for the scheme.

He said, under this measure, all Sarawak registered SMEs must first comply with the National SME Development Council (NSDC) SME definition.

Among the conditions of the soft loans are working capital in respect to salary payment, interest free loan amount from RM20,000 to RM500,000, no collateral required, sole proprietorship, partnership and Sdn Bhd, and business in operations three years and more.

“For SMEs to better understand the interest free loan assistance provided, let me share an example. The loan amount is to be based on total staff salaries for six months.

“If you have ten staff with each salaried at RM3,000 a month, multiplied with six months, then the total loan amount will be RM180,000.

“That amount will be released in full to the SME once the necessary documentation is completed. I hope this measure will ensure business resilience and job security for the people,” he said.

The chief minister added, for SMEs operating less than three years, they can still opt to apply for the RM50 million Micro Credit Scheme announced in the first Sarawakku Sayang package.