SME Bank Launches SFT3 Financing To Boost The Country’s Tourism Sector

SME Bank, an agency under the Ministry of Entrepreneur Development provided a timely boost to the country’s tourism sector with the launching of the Special Fund for Tourism Fund (SFT3), in collaboration with the Ministry of Tourism, Arts and Culture Malaysia (MOTAC). The fund amounting RM500 million was introduced by the government during the 2019 Budget announcement.

The SFT3 financing can be used for tourism projects promoted by the government, to build or renovate tourism or historical properties, transportation services, building resorts and its infrastructures, manufacturing or supplying of products or facilities related to tourism as well as acquisition or redemption of existing facilities which are related to tourism activities. Handcraft and homestay industries are also eligible to apply for the SFT3 financing.

To make SFT3 more attractive and achieves its objective, 2% subsidy from the profit rate is provided by the government to reduce the operating cost of SMEs in the tourism sector

Aria Putera Ismail, Group President / Chief Executive Officer, SME Bank said, “The fund has been made available since 2002 through the Special Fund for Tourism, and as at 31 December 2018, SME Bank has approved financing amounting RM2.0 billion to 478 companies.”

The tourism industry has contributed 14.9% or RM201.4 billion to the growth of the nation’s economy in 2017 compared to 12.8% in 2012. This shows an upward trend since 2012 and it has grown rapidly with an average annual growth rate of 5.69% over six years.

Tourists from Asia namely Singapore, Indonesia followed by China are the top three largest contributors to the total number of foreign tourists in Malaysia, which was 25.9 million in 2017. The government has targeted 30 million foreign tourist arrivals to Malaysia which will contribute RM100 billion in foreign currency revenue to the country's economy by 2020.

SME Bank with the assistance from the government has provided various financing products and special funds to assist the entrepreneurs in various stages from start-up to operating in the global arena. Since its inception in 2005, SME Bank has approved more than RM30 billion of financing to more than 17,000 entrepreneurs.

Through its Upward Migration programme, more than 1,200 SME entrepreneurs have successfully elevated their businesses to a higher level. Centre for Entrepreneur Development and Research Sdn. Bhd. or CEDAR, a wholly owned subsidiary of SME Bank has successfully coached more than 36,000 entrepreneurs in various SME development programmes.

The launching of SFT3 financing was held in Langkawi on 2 March 2019 and was graced by the presence of Yang Berhormat Datuk Mohamaddin bin Ketapi, Minister of Tourism, Arts and Culture, and YBhg. Datuk Wan Suraya Wan Mohd Radzi, Secretary General, Ministry of Entrepreneur Development.