SME Bank’s Sustainability Sukuk Transiting SMEs Into Green Circular Economy

SME Bank’s successfully priced and issued the Sustainability Islamic Medium-Term Notes (IMTNs); with the final price for the issuance recording 59 basis points above the corresponding 5-year Malaysian Government Securities, paving the way in transiting SMEs into the green circular economy.

Chairman of SME Bank, Dato’ Seri Nazir Ariff said, “The issuance of the Sustainability Sukuk inaugurates wider opportunity for our SMEs to develop their business, technology and services and supporting the Government’s aspiration of developing the green technology sector that is expected to contribute RM100 billion to the country’s GDP and generating 230,000 green job opportunities by 2030 (Source: MGTC – Malaysian Green Technology & Climate  Change Centre). These numbers will accelerate the economic recovery growth after being dampened by the pandemic.”

Dato’ Seri Nazir Ariff added, “SME Bank is honoured to be the trailblazer in opening up ways for SMEs to venture into the green economy and the appointment of RHB Investment Bank Berhad as the Sole Principal Adviser and Sole Lead Arranger as well as the experienced Joint Lead Managers from AmInvestment Bank Berhad, CIMB Investment Bank Berhad, Maybank Investment Bank Berhad and RHB Investment Bank Berhad has directly contributed towards this achievement.”

SME Bank’s Group President/Chief Executive Officer, Aria Putera Ismail said, “The proceeds raised from the issuance of the Sustainability Sukuk will address the issues of insufficient financing for the green and social related projects. These proceeds will also widen our horizon as we are able to finance projects that directly support 11 of the 17 United Nations Sustainable Development Goals (UN SDGs).”

“This milestone is a testament for SME Bank’s utmost support on Malaysia’s economic recovery and at the same time addressing the issues of making the circular economy in Malaysia the new norm. The Bank has long been supporting the green tech SMEs through the 

Green Technology Financing scheme and other financing facilities. We have also been recognised by the Ministry of Energy and Natural Resources with the Special Awards for Sustainable Energy Financing under the Development Financial Institution (DFI) category end of last year. Hence, SME Bank's Sustainability Sukuk is a step forward in demonstrating our commitment to creating positive impacts on society and the environment. This is also aligned with the UN SDGs blueprint to achieve a better and more sustainable future for all,” added Aria.

SME Bank’s sustainability approach focuses on sustainable development, where the Bank strives to educate and create long-term value for our stakeholders, including customers, employees, and society and at the same time, balance the economic, social and environmental impacts in all its business decisions. The Bank’s approach to sustainability is based on three pillars namely the responsible banking, responsible business practices and creating positive social impact.

The overwhelming response from investors has enabled SME Bank to finalize the book building process, bidding more than 3.56 times or RM1.78 billion of the actual issuance amounting to RM500 million at a competitive rate of 3.10%.