SME Bank’s Government Guaranteed Islamic Medium Term Notes (IMTNS) Oversubscribed 4.5 Times

The investors in the country have acknowledged SME Bank’s strong financial standing, market presence and the important role played by the Bank in nurturing and developing the SMEs when the Bank’s Government Guaranteed Islamic Medium Term Notes (IMTN) issuance was oversubscribed 4.5 times or RM2.2 billion from the actual issuance amounting RM500 million on 16 April 2020.

Aria Putera Ismail, Group President/Chief Executive Officer of SME Bank said, “The issuance of the RM500 million sukuk has attracted several financial institutions / asset management companies. Despite the economic uncertainty and the rapid fluctuations of the money market, the negotiations were closed at 23 basis points for five years and 20 basis points for seven years respectively. The IMTN has also been set with a competitive final price of between 3.02 percent and 3.30 percent.”

SME Bank, an agency under the supervision of the Ministry of Entrepreneur Development and Cooperatives has been quick in responding to the current situation by implementing a few initiatives, in line with the Government's Economic Stimulus Plan to help support the viability of the SME sector during the Movement Control Order period and until the end of the COVID-19 crisis in the country.

Among the initiatives already undertaken by SME Bank include the automatic deferment of financing payment as well as the rental deferment payment by the tenants of the factory lots at the SME Bank’s Entrepreneur Premises Complex. In addition to these deferments, SME Bank also offers a number of financing packages under Bank Negara Malaysia’s funds as the Special Relief Facility (SRF), Automation and Digitalisation Facility (ADF), Agrofood Facility (AF) and All Economic Sectors Facility (AES). These efforts are to ensure SMEs are able to better manage their cash flow and be fully prepared to the challenges when the COVID-19 crisis ends.

SME Bank’s wholly owned subsidiary, The Centre for Entrepreneur Development and Research Sdn Bhd (CEDAR) is equally active in sharing useful tips and information on line to assist and guide the entrepreneurs to reassess their current business models. The objective is to encourage the entrepreneurs to make necessary adjustments with the intention of maintaining their business performance especially during this crisis period. In addition, entrepreneurship training programs continue to be conducted via on line channels and various social media platforms. Since its establishment in 2013 and up to date, CEDAR has trained more than 43,000 entrepreneurs in various entrepreneurship development programs.

Since its inception in 2005 and as of 31 December 2019, SME Bank has approved financing of over RM32 billion to more than 17,200 SME entrepreneurs. SME Bank has also been entrusted by the government to lead the National SME Digital Platform which is a part of SME Bank's 2-Years Acceleration Plan initiative.

Two digital initiatives have been launched under the National SME Digital Platform namely the ScoreXcess, a portal that processes micro financing applications and runs the pre-approval process before the applications are submitted to the participating financial agencies. Since its launch on 30 September 2019 and as of 1 April 2020, ScoreXcess has received 851 applications and financing amounting RM12.5 million has been distributed to financial agencies for processing.

The second initiative under this platform is ODELA, an e-commerce platform launched on 3 December 2019. ODELA facilitates business-to-business (B2B) transactions to be more systematic and informative. SME Bank aims to record RM9.8 billion of transactions to be made through ODELA over a five-year period and as of 7 April 2020, transactions worth RM355,000 have been recorded.