2.

1 SME BANKING
Small and Medium Enterprise (SME) are the engine of growth in our
economy. They increase Malaysias gross domestic product (GDP) and
provide Malaysian with job opportunities. There are 3 types of size in SME,
which is (i) MICRO which have full time employee not exceeding 5 or
annual sales turnover of less than RM300, 000, (ii) SMALL which have full
time employee between 5 to 29 employees or annual sales turnover of
between RM300, 000 & less than RM3million and (iii) MEDIUM which have
full time employee between 30 to 75 employees or annual sales turnover
of between RM3 million & RM20 million.
Hong Leong acknowledge the importance by providing SME with
financial funding. Typically it require a borrower to have a good financial
track record and is a Malaysia owned business where the ownership is at
least 51% by Malaysian based under the Companies Act 1965. Financial
funding provides SME with an instrument to fund businesses and increase
its number and its entrepreneurship opportunities.

Hong Leongs SME

Banking is offering 4 types of schemes, which is by (1) Partners SME

Initiatives, (2) Credit Guarantee Corporation Scheme, (3) Client Charter,
(4) Bank Negara Schemes.
2.1. A Partners SME Initiatives
Hong Leong being one of the commercial bank member with the
collaboration of the Association of Bank in Malaysia (ABM) launching
PARTNER. PARTNER is a simplified process and procedure of application
for SME loans.
Features
1

Straight

Forward

Loan 5

.
2

application
Time Line revised (Appendix 2)

.
3

.
Not subject to consent from 7

Checklist

.
4

authorities
Not subject to other 3rd party

(Appendix 3)
Long duration of approval

.
6

.
8

Not subject to CGC approval

Clean or unsecured loan
document

required

Revised Common Timeline for Straight-forward SME Loan Application is

about 6 to 10 weeks (Appendix 2). Unsecured loan are not guaranteed by
any type of property, however the interest rate would be much higher than
other schemes. Apart from that, the checklist document required consist of
two checklists, the first detailing the general types of documents or
information required to be submitted with any application and the second
setting out the more specific documents or information required for
various kinds of facilities (Appendix 3). To apply this, you will need to fill
SME FINANCING ENQUIRY FORM which you can find in (Appendix 1).
2.1.B Credit Guarantee Corporation Scheme
A Credit Enhancer Scheme which facilitate credit such as:
1

Term Loan

6.

Bills Purchased

.
2

Overdraft

7.

Bankers Acceptance

.
3

Letter of Credit

8.

Shipping / Performance / Bank

9.

Guarantee
Hire Purchase

.
4

Trust Receipt

.
5

Export Credit Refinancing (ECR) 1

Leasing

0.

Features
1

High Lending Rate 2% above the Base Lending Rate (BLR)

.
2

High Guarantee Coverage from 30% to 90%.

.
3

High Guarantee Fee - Unsecured Portion - 2.40% to 4.00% per annum

.
4

- Secured Portion - 2.10% to 3.20% per annum

Refundable Guarantee Fee Full or half refund if accommodated with

.
5

the refund policy

Maximum loan limit is RM10 Million

Franchise businesses can apply under this scheme

.
Eligibility
1

Malaysian-controlled or Malaysian-owned businesses

.
2

Businesss definition under SMEs

.
3

Borrower must have a good credit record

.
2.1.C Client Charter
Apart from above, Client Charter also provide loans to SMEs under the
purpose of expansion for the business, increase working capital or
acquisition of properties or machinery.
They facilitate credit such as:
1

Term Loan

7.

Foreign Exchange Contract

.
2

Overdraft

8.

Bankers Acceptance

.
3

Letter of Credit

9.

Shipping / Performance / Bank

10

Guarantee
Hire Purchase

.
4

Trust Receipt

.
5

.
Export Credit Refinancing (ECR) 11

Leasing

.
6

.
Under Bank Negara Malaysias 12

Under Islamic Bankings Loan

Loan

Features
1

Short Duration of Approval (minimum 1 month)

.
2

Statement of Account Provided E.g. Overdraft (monthly), Term Load

.
3

(semi-annually)
Simple and fast procedure

Eligibility
1

Malaysian-controlled or Malaysian-owned businesses.

.
2

Businesss definition under SMEs.

.
3

Satisfactory financial track record of minimum 3 years.

.
4

Satisfactory relationship (if any) with other financial institutions.

.
2.1.D Bank Negara Schemes
Bank Negara provide to type of fund, that is Funds for Small and Medium
Industries 2 (FSMI2) and New Entrepreneurs Fund 2 (NEF2). The objective
is to increase working capital and expansion of productive capacity.

Features
1

Lending rate is 4% p.a. maximum*

.
2

Maximum tenure is 5 years

.
3

Maximum loan limit is RM5 million

.
4

Companies in all sectors

.
*Subject to Change
Eligibility
Eligibility for FSMI2
1

Malaysian-controlled or Malaysian-owned businesses.

.
2

Businesss definition under SMEs.

.
3

Maximum shareholders funds is RM 2 million

.
4

Shareholding by Public Listed Companies and Government Link

.
5

Companies (if any) should not exceed 20%

Operation not longer than 7 years unless average net profit is

marginal over the last 3 years. (i.e. less than 5% net profit margin)

Eligibility for NEF2

1

Wholly

owned

Bumiputera

institution

residing

in

Malaysia

incorporated under the Companies Act 1965, the Co-operative

Societies Act 1993, the Societies Act 1966, registered with the

Companies Commission of Malaysia or any other authoritative bodies

Businesss definition under SMEs.

.
3

Maximum shareholders funds is RM 2 million

.
4

Shareholding by Public Listed Companies and Government Link

.
5

Companies (if any) should not exceed 20%

Operation not longer than 7 years unless average net profit is

marginal over the last 3 years. (i.e. less than 5% net profit margin)