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SME BANK FINANCING FACILITIES

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SME Bank: Major Roles

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INNOVATION AND

TECHNOLOGY ADOPTION

- Encourage greater innovation and

technology adoption by SMEs

ACCESS TO FINANCING

- Ensure that

creditworthy SMEs have access to

financing for working capital and investment

LEGAL AND REGULATORY

ENVIRONMENT

- Ensure that legal and regulatory environment is

conducive for the formation and

growth of SMEs, while protecting the broader interest of

society.

HUMAN CAPITAL

DEVELOPMENT

- Enhance human capital and

entrepreneurship development among

SMEs

MARKET ACCESS

- Expand the

market access for goods and services produced by SMEs

INFRASTRUCTURE

- Improve the infrastructure for the

SMEs to operate effectively.

6 Focus Areas

41% share of GDP

(2010: 32%)

62% share of employment

(2010: 59%) 25% share of exports

(2010: 19%)

NATION

Our role in SME Master Plan 2012-2020

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Government’s Economic Agenda - NKEAs

Islamic

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SME Bank: Financing Facilities

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SME Definition and General Financing Criteria

Full time

employee

Manufacturing (including

Agro-Based) & Manufacturing Related

Services

Services Sector (including ICT)

Micro Less than 5 employees Less than 5 employees

Small Between 5 - 75 employees Between 5 - 30 employees

Medium Between 75 - 200 employees Between 30 - 75 employees

Annual Sales

Micro Less than RM300,000 Less than RM300,000

Small Between RM300,000

& less than RM15 million

Between RM300,000

& less than RM3 million

Medium Between RM15 million

& RM50 million

Between RM3 million

& RM20 million

Eligibility Criteria

Status Entity defined as Small Medium Enterprise (SME)

Business activity Activities related to manufacturing, services and construction that not in contrary to Shariah principles

Primary agriculture, mining, private/commercial housing, gambling and other activities determined by the Bank from time to time ARE NOT ELIGIBLE

Ownership Malaysian owned entity ( >51% Malaysian equity)

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SME Definition and General Financing Criteria

Application Criteria

Financing size RM20,000.00 to RM50,000,000.00

Tenure Up to 30 years depending on items financed by the Bank

Profit rate From 5% to 8% based on terms & condition of the funds

Repayment mode Monthly, quarterly, half yearly depending on cash cycle

Collateral Depending on ‘assigned risk rating’ or nature of financing e.g. contract financing

Equity structure Depending on types of funds

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Type of Financing

• Bai’ Bithaman Ajil

• Bai’ Istisna’

• Ijarah

• Ijarah Thummal Bai’

• Land

• Building

• Machineries

• Equipments

• Motor Vehicle

FIXED ASSET

• Fixed

• Revolving

• Guarantee

• Bai’ Murabahah

• Bai’ Dayn

• Bai’ Inah

• Kafalah

WORKING CAPITAL

PROGRAMS/PRODUCTS OFFERED

• CONTRACT FINANCING SCHEME

• I – ENTERPRISE PREMIS FINANCING ( I-EPF)

• TERAS FINANCING SCHEME

• YOUNG ENTREPRENEUR FUND

• HALAL DEVELOPMENT FUND

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Financing Features – Contract Financing

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Subject Salient Features

1. Financing Concept a) Pre-Implementation Financing - Guarantees (as provided for and required under the contracts) - Working Capital Financing b) Post-Completion Financing - Financing receivables due from awarding parties, based on discounting of invoices already submitted to awarding parties or progress claims duly certified by the awarding parties or the awarding parties’ representative.

2. Financing Limit RM750,000 and above. (Guided by the highest deficit position from the contract’s projected cash flow)

3. Margin of Financing

Up to 90% of the contract cost

Financing Features – Contract Financing

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Subject Salient Features

4. Collateral a) Cash Collateral Placement i) Bank Guarantee (Performance Bond and other contract related security deposits) ii) Advance Payment Guarantee (APG) iii) Other Pre-Financing facilities b) Sinking Funds Deduction i) Effected upon receipt of every collection proceeds.

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i-Enterprise Premise Financing (i-EPF)

i-Enterprise Premise Financing is a financing package for the refinancing and purchase of shop-house, shop-lots, office spaces and factories. It also covers acquisition of completed or under construction properties. The package includes financing for working capital.

Margin of financing : up to 150% of Market Value (MV) of the property Longer tenure up to 30 years ; with grace period of up to 6 months (for completed

Property) and 24 to 36 months (for property under constriction)

Facility Eligibility

Islamic Bai Bithaman Ajil (BBA) Bai Inah

Sole-proprietor and partnership Professionals Private Limited Co within the National definition of

SME Individual business owner

Teras Financing Scheme

• TERAS Financing Scheme is a financing package to facilitate business expansion programme through collaboration between SME Bank and TERAJU (Unit Peneraju Agenda Bumiputera).

• Maximum margin of Financing : from 90% to 100%.

• Financing amount : RM5.0 million to RM20.0 million per customer.

• Tenure : 10 years to 30 years

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Facility Eligibility Criteria

Factory Building / business premises SME Companies under TERAS program

Working Capital Plant / Machinery Vehicle Renovation

Bank Guarantee

Halal Development Fund

• Halal Development Fund is a financing package to support Bumiputera and Non-Bumiputera entrepreneurs involved in Halal-related sectors in creating more Halal Champion.

• Collaborative effort of SME Bank with HDC.

• Maximum margin of financing : from 80% to 100%.

• Financing amount : Based on ‘Single Customer Limit’ approved by Bank.

• Tenure : 5 years to 25 years.

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Facility Eligibility Criteria

Landed Property Working Capital Plant / Machinery & Vehicle

SME Companies Must not be a subsidiary of a GLC / MNC Minimum 60% of Malaysian equity.

Bank Guarantee

Bumiputera Halal Development Fund

• Bumiputera Halal Development Fund is a financing package to support Bumiputera entrepreneurs involved in Halal-related sectors in creating more Halal Champion.

• Collaborative effort of SME Bank with TERAJU and HDC.

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Facility Eligibility Criteria

Factory Building Business Premises

SME Companies Minimum 2 star SCORE rating by SME Corp Must not be a subsidiary of a GLC/MNC Minimum 60% of Bumiputera equity CEO/MD must be Bumiputera Majority of the management teams are Bumiputera

Working Capital Plant/Machinery Vehicle Renovation

Bank Guarantee

Bumiputera Halal Development Fund … (cont)

• Maximum margin of financing : from 90% to 100%.

• Financing amount : RM3.0 million to RM10.0 million per customer

• Tenure : 10 years to 30 years.

• Credit Parameters

Satisfactory CCRIS report

CRR Search for Companies and Director/proposed Guarantors does not indicate on-going legal actions

Obtained credit rating of 1-5.

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Young Entrepreneur Fund (YEF) is a special fund allocated by the Government as part of its continuous strategy of acculturation and creation of new entrepreneurs among Malaysia youth. The purpose of this fund is to provide alternative access to the young entrepreneurs in obtaining financing to start their new business as well as for the needs of their existing business .

Financing Concept

Islamic Bai Bithaman Ajil (BBA) Bai Inah Ijarah Ijarah Thummal Bai’ Bai’Istisna

Our Attractive pricing

5% per annum (Annuity Monthly rest)

Financing limit

Minimum : RM20,000 Maximum : RM100,000

Tenure

Up to 7 years including maximum 1 year grace period

Young Entrepreneur Fund (YEF)

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Malaysian youth between 18 to 30 years of age, owning the business. The business is registered with Suruhanjaya Syarikat Malaysia (SSM) or other authorised registering

bodies under a sole-proprietorship or partnership firm, or a Sdn Bhd company. For a partnership firm or a Sdn Bhd Company, the youth applicant must hold majority shares of more

than 51% AND is the key decision maker. Minimum possession of entrepreneurship/vocational or at least 2 years experience in business to be

financed Those without entrepreneurship/vocational certificate could be considered through the acquisition

of entrepreneurship training from Centre for Entrepreneur Development and Research (CEDAR), SME Bank.

Start-up companies / firms may be considered

Young Entrepreneur Fund (YEF) ...(cont)

Working Capital Requirement Margin of Financing

Working Capital – Purchases of raw materials, stocks, overhead cost, renovation, advertising & promotion etc.

Up to 100%

Purchase of Assets for Business Operations Margin of Financing

Loose tools, machinery & equipment, office equipment, vehicle etc Brand New Used/Reconditioned

Up to 100% Up to 75%

BUSINESS GROWTH STAGE

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STAGE IN LIFE CYCLE

SAMPLES OF PROJECTS COMMERCIALISED BY THE BANK

WOOD PELLET

PLYWOOD FROM PALM OIL TRUNK

CELLULOSE

PAPER FROM EFB

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EXAMPLE OF COMMERCIALIZATION PROJECT

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Wood Pellet

KEY SUCCESS FACTORS

FOR COMMERCIALIZATION PROJECT

SUPPLY OF RAW MATERIAL

PRODUCT ACCEPTANCE/DEMAND

PRODUCT QUALITY

TECHNICAL KNOW-HOW

TECHNOLOGY TRANSFER – IF ANY

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Thank you

www.smebank.com.my zarina.ismail@smebank.com.my

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Checklist of Required Documents

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1. Document for Private Limited / Limited company

- Form 9,24,44 & 49

- Form 13 & 32A [if applicable]

- Memorandum and Articles (M&A)

*all documents must be verified by Company Secretary.

2. Background Owner / Directors / Key Management Personnel

- Personal Detail form & copy of MyKad

- Company Profile

3. Finance

- Audited accounts (3 years)

- Latest management accounts [Together with trade debtors & creditors

list, ageing list & value]

- Latest 6 months Bank Statement

4. If Applicant Has loan from Other Financial Institutions

- Letter of Offer

- Loan Statement / Current Account Statement [Latest]

Checklist of Required Documents

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5. If Renting / Leasing Site / Building

- Tenancy or Leasing Agreement / ‘Landlord Waiver’

6. If Involving Third Party Guarantee

- Personal Detail form [of individual]

- Company Profile

7. If Involving Export Market

- Importer Profile

- Market Agreement [if any]

8. If the Loan for Construction / Purchase Building / Factory

- Sale and Purchase Agreement / Letter of Offer / Contract Agreement

- Project Site Location Plan

- Copy of Land Title

- Estimated Cost by Quantity Surveyor / Architect / Consultant

Engineering

- Tender Summary

- Property Valuation Report by Registered Panel Valuer

- Building Plan

Checklist of Required Documents

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9. If the Application for Working Capital

- The List of Main Debtors. Ageing & Value

- The List of Main Creditors. Ageing & Value

10 If the Application of Machinery / Equipment

- Quotation

- Sale and Purchase Agreement / Guarantee [if any]

- Technology Transfer Agreement [if any]

- Assessment Report [If Applicable, unless evaluated by the Technical

Department, SME Bank]

- Machine Brochure

11. If Funding For Construction Contracts and Civil

- Offer Letter [Letter of Award]

- Project Cash Flow

- Contract Provider Information

- Expected Profit / Loss Statement Project

- Project Implementation Schedule

- Building Plan / Design & Illustration [If the Contract]

- Architect / Quantity Surveyor’s Name and Profile

Checklist of Required Documents

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12. Project Plan

- The principal activity of the company

- Summary of the proposed Project

- Technical Aspects

- Marketing Aspects

- Management Aspects

- Financing Aspects

- Business License

- Approval of the Department of Environment Malaysia (If

applicable)

13. Other Documents

- Certification relating to business

- Business-related licensing

14. Other documents that may be required