Image credit: The Edge Markets

KUALA LUMPUR: Bank Negara Malaysia will establish an additional RM2 billion financing facilities under Targeted Relief and Recovery Facility (TRRF) to provide relief and support recovery for small and medium enterprise (SMEs).

The facility is for eligible SMEs whose revenues have been affected by the recent enhanced and conditional movement control orders, the central bank said in a statement.

In addition, SMEs in targeted vulnerable sectors, namely personal services, food and beverage services, human health and social work, arts, entertainment and recreation subsectors, will also be eligible for the TRRF.

Offered at a concessionary rate of up to 3.5 per cent, the TRRF will be available through participating financial institutions, with guarantee coverage by Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and Credit Guarantee Corporation (CGC). 

The facility will be open for applications from December 1, 2020.

Further, Bank Negara will also establish High Tech Facility (HTF) worth RM500 million to support SMEs in high-tech sectors and RM110 million will be increased in allocation for the Micro Enterprises Facility (MEF).

As the high tech sectors and innovation-driven firms are instrumental in realising new growth opportunities, the HTF aims to sustain Malaysia's competitive positioning in global value chains and safeguard high-skilled jobs.

The central bank said the banking industry has agreed to provide additional targeted repayment assistance for individuals and SME borrowers.

B40 and microenterprise borrowers who had previously received other forms of targeted repayment assistance and who wish to request for further assistance under the additional measures announced today can still do so by contacting their banks, the central bank said.

Meanwhile, the government, Bank Negara and the financial industry are collaborating on several initiatives to further assist individuals and SMEs through the expansion of iTEKAD programme as well as Perlindungan Tenang Protection for B40.

In tandem with the increase in allocation to MEF, the iTEKAD programme will be expanded with the participation of more Islamic banks. 

This will be done in collaboration with a wider network of states and implementation partners, which will be participating in the iTEKAD programme in 2021.