Published on: Wednesday, July 13, 2005 |
Kuala Lumpur: The country's estimated 204,699 small and medium scale enterprises (SMEs) now have better access to Islamic financing for their business operations.
This came about with the Small and Medium Industries Development Corporation (Smidec) appointing Bank Islam Malaysia Bhd and Bank Muamalat Malaysia Bhd to be among its panel banks.
Smidec chairman Datuk Kalsom Abdul Rahman said there has been increasing interest among SMEs in utilising Islamic financing in their business operations.
She said to meet the needs of SMEs, the appointments of Bank Islam and Bank Muamalat would enable the banks to offer Islamic financial instruments as an alternative to conventional banking.
She was speaking at the signing of memoranda of understanding with the two banks here Tuesday.
At the ceremony, Smidec also signed an agreement with Telekom Malaysia for it to be the main sponsor in major programmes being organised by Smidec, namely the Asian SME Convention 2005, Smidex 2005 exhibition and Enterprise 50 Awards for enterprising home-grown companies.
Kalsom said for the overall development of SMEs, Smidec provides financial assistance programmes in the form of grants and soft loans but these are mainly for capacity building rather than operational purposes.
She said the grants are provided under three major programmes comprising technology development, consultation and marketing, and skills development.
As at May 31 this year, out of 13,979 applications received, a total of 9,562 applications were approved with grants amounting to RM191.46 million.
In terms of expenditure, a total of RM136.01 million was disbursed. Kalsom said due to limited resources, the grant scheme is restricted to specific development programmes.
She said to enable SMEs to have a greater access to financing, Smidec currently provides three types of soft loan schemes, namely the Soft Loan for SMEs (SLSME), Soft Loan for Factory Relocation (SLFR), and Soft Loan for Information and Communications Technology (SLICT) in collaboration with Malaysian Industrial Development Finance Bhd (MIDF). As at May 31 2005, 221 projects were approved under SLSME with loans amounting to RM161.72 million.
Introduced in January last year, the SLFR scheme provides assistance for SMEs to relocate their operations to approved industrial sites and six projects amounting to RM5.33 million have been approved.
As for the SLICT, which was started in March last year, 17 projects were approved with loans amounting to RM2.89 million with most of the approvals for the metal products, machinery and engineering, and plastic products sectors.
Kalsom said for the whole banking institutions, a total of RM31.6 billion new loans had been approved to more than 92,000 SME accounts last year. "This is a significant increase of 21.9 percent compared with 2003," she said.
She added that loan disbursement increased by 15.3 percent to RM100.4 billion, while outstanding loans to SMEs expanded by 7.7 percent to RM88.3 billion.
On a sectoral basis, lending to SMEs was diversified, with almost two-third being channelled to distributive trade, manufacturing and construction sectors, Kalsom said.
This, she added, was reflective of the business focus of the majority of the SMEs.- Bernama
