The PEMULIH Government Guarantee Scheme (PGGS) is a government guarantee scheme to provide financing assistance to Malaysian SMEs and Mid-Size Companies (MSC) via:

• New Financing (especially to large SMEs and MSC); and
• Restructuring of current financing facilities with moratorium and extension of tenure, as well as further funding of working capital to revitalise their business, if necessary

Applications are open until full utilisation of the scheme limit of up to RM30 billion only.

PGGS is open to all entities (SMEs and Mid Size Companies (MSC)) in all industries with annual revenue of not more than RM500 million based on their audited accounts (or relevant income tax returns where applicable) for any of the financial year ending 2019 or later:

1. Sole proprietorships owned by a Malaysian citizen; or
2. Partnerships, and Limited Liability Partnerships controlled and majority owned by Malaysian Citizens; or
3. Companies with at least 51% shares held and controlled by Malaysian citizens.

The Customer must be incorporated under:

1. Registration of Business Act 1956;
2. Companies Act 1965 or 2016;
3. Limited Liability Partnership Act 2012;
4. Sabah and Sarawak local authorities and district offices; or
5. Respective Statutory Bodies for professional service providers.

Other criteria may apply, depending on the company’s profile and credit assessment by the FI and SJPP.

Yes, the revenue criteria refer to revenue of not more than RM500 million in any financial year ending 2019 or later. You will have to provide the audited accounts (or income tax return for sole proprietors or partnerships) as supporting documents.

PGGS can be used for:

• New financing for Working Capital and Capital Expenditure; and/or
• Restructuring of existing financing facilities with a 12-month moratorium and extension of tenure; and/ or
• Additional Working Capital (companies with financing facilities rescheduled and/or restructured that was approved on 1 March 2020 onwards are eligible). The facility cannot be used to refinance existing facility granted by the same or other participating FIs

The type of facilities are Term loan/ Term Financing-i, Overdraft/ Cash Line-i, Revolving Credit/ Revolving Facility-i and Trade/ Trade-i Facility.

• For new financing - the financing limit is up to RM20 million
• For restructured financing facility; and/ or additional working capital, group exposure up to RM50 million

Limits are subject to the aggregate group (including Related Parties) limit not exceeding RM50 million financing limit for all other schemes under SJPP including Danajamin Prihatin Guarantee Scheme, Bus and Taxi Hire Purchase Rehabilitation Scheme and PGGS.

The aggregate group limit including related parties must not exceed RM50 million financing limit for all other schemes under SJPP. If you have not reached this limit, then you would still be eligible to apply.

A) For new financing:

The guarantee coverage is 80% and the guarantee fee rates are:

• 1% per annum payable upfront

Example A: Syarikat Masam Manis Sdn Bhd has been affected by the lockdown and requires funding urgently. They are applying for a new financing facility of RM5 million with a tenure of 5 years. A new application is made for PGGS and the guarantee fee per annum is calculated by Financing Amount x Guarantee Coverage x Guarantee Fee Rate.

Guarantee Fee per annum: RM5,000,000 X 80% X 1% = RM40,000 p.a.

B) For the restructuring of existing financing facilities:

The guarantee coverage is 80%, and a guarantee fee rate of 0.75% is applied to the guarantee coverage.

The following formula is used to determine the Guarantee Coverage:

Guarantee Coverage = A x B x C where
A = 80%
B = 36 months (3 years)
C = Average monthly instalment for Year 2 and Year 3 of the restructured facility

Example B: Syarikat Koo Seafood Sdn Bhd would like to apply for restructuring of their current term loan. The restructured financing facility with the extended tenure inclusive of moratorium of 12 months is RM6.0 million, with an average monthly instalment of RM62,500. If approved, the applicable guarantee fee would be:

80% x 36 months x 62,500 x 0.75% = RM13,500 per annum.

C) For additional working capital:

The coverage is up to 80%, an a guarantee fee rate of 0.75% is applied to the guarantee coverage.

For new financing:
The tenure of guarantee for new financing facilities is up to 10 years.

For the restructuring of existing financing facilities:
3 years, inclusive of a 12-months moratorium.

For additional working capital:
The tenure of guarantee for additional working capital facilities is up to 10 years.

For new financing:
The interest/ profit rate should not exceed the FI’s BLR/ BFR + 2%

For the restructuring of existing financing facilities:
All interest/ profit rates charged on the restructured facility shall not be higher than that of the existing facility, prior to the restructuring.

For additional working capital:
The interest/ profit rate should not exceed the FI’s BLR/ BFR + 2%

You can discuss your requirements whether it is for new financing or to restructure your existing credit facilities with the Financial Institutions (FI). For a list of our participating FIs, please refer to our website www.sjpp.com.my. Subject to the FI’s assessment, the FIs will submit the guarantee application to SJPP.

For more information, please contact us at esjpp@prokhas.com.my or 03-2096 5000.

There are six (6) GGS available namely:

• Working Capital Guarantee Scheme (WCGS)
• Working Capital Guarantee Scheme - Start Up (WCGS-SU)
• Working Capital Guarantee Scheme - Bumiputera (WCGS-B)
• Working Capital Guarantee Scheme - Export (WCGS-X)
• Working Capital Guarantee Scheme - Women (WCGS-W)
• Automation & Digital Guarantee Scheme (ADGS)

• The Government of Malaysia will guarantee the Financial Institutions (“FIs”) on the credit facilities provided to eligible SME companies with a guarantee coverage up to 80%.
• Eligible SMEs should apply for credit facilities at any of our participating FIs.
• The FIs are the source of funds and the Government of Malaysia will guarantee FIs as mentioned above.

The GGS can be used for credit facilities relating to:

• Working Capital e.g. purchase of raw materials
• Capital Expenditure (CAPEX) e.g. purchase of assets

This guarantee scheme cannot be used to refinance existing facility granted by the same or other participating Financial Institutions.

The GGS’ objective is to address issues faced by SMEs that are lacking of collateral and access to funding. It is an alternative option for SMEs to obtain credit facilities from FIs where there is lack or no collateral.

This financing tenure refers to the period where the GGS is available to all participating FIs, i.e. 31 December 2035 or upon full utilisation of the GGS limit, whichever is earlier

The guarantee fee is payable at 1.0% per annum (WCGS) and 0.75% (WCGS-SU, WCGS-B, WCGS-X, WCGS-W and ADGS) which is payable in advance upon approval of the financing facilities by the participating FIs.

The minimum guarantee fee is RM1,000 (for WCGS) and RM500 (for WCGS-SU, WCGS-B, WCGS-X, WCGS-W & ADGS).

• The interest rate will be determined by the FIs that provide the financing facilities. However, there are no interest rates charged by SJPP, as we are not the source of funds and do not provide any credit facilities directly to the SMEs.
• Eligible SJPP Borrowers with at least 50% export turnover will also enjoy a 2% rebate on the interest/ profit rate charged by the FIs, valid until the year 2022.

• WCGS: RM100,000 - RM10.0 million
• WCGS-SU: RM50,000 – RM500,000
• WCGS-B: RM100,000 – RM3.0 million
• WCGS-X: RM100,000 - RM10.0 million
• WCGS-W: RM100,000 - RM1.0 million
• ADGS: RM100,000 – RM10.0 million

An SME may borrow up to RM10.0 million in credit facilities by utilising multiple GGS or from different FIs, at any one time. For SMEs that are sole proprietors and partnership, the financing limit is RM1.0 million

Depending on the scheme selected, the guarantee cover is up to 80% by the Government of Malaysia for all GGS on the total financing given by participating FIs.

SME Companies in ALL sectors or industries as follows:

Non-Manufacturing

Companies with sales turnover not exceeding RM20.0 million OR full-time employees not exceeding 75 workers.

Manufacturing

Companies with sales turnover not exceeding RM50.0 million OR full-time employees not exceeding 200 workers.

Incorporated under:

• Registration of Business Act 1956
• Companies Act 1965 or 2016
• Limited Liability Partnership Act 2012
• Sabah and Sarawak local authorities and district offices
• Statutory Bodies that provide professional services

Shareholding:

At least 51% or more shares held by Malaysian

Additional Requirements:

• At least 51% or more shares held by Bumiputera for WCGS-B
• At least 51% or more shares held by Malaysian women for WCGS-W
• SMEs applying must be within 6 months to 2 years in operations for WCGS-SU
• Mandatory site visit will be conducted for WCGS-SU
• At least 30% or more of turnover are export-based for WCGS-X

Excludes:

1) Entities that are public-listed on the Main Board; and

2) Subsidiaries of:

• Public-listed companies on the main board;
• Multinational corporations (MNCs);
• Government-linked companies (GLCs);
• Syarikat Menteri Kewangan Diperbadankan (MKDs); and
• State-owned enterprises (SOEs).

The definition is as per the guidelines issued by SME Corp. Malaysia and endorsed by the National SME Development Council.

To comply as a Bumiputera Status Company under WCGS-B, an SME should have at least 51% shareholdings owned by Bumiputera.

• A viable business is a business with the ability to generate cash flow from its operations to pay off its financial obligations.
• Participating FIs have full discretion to evaluate and determine whether an applicant meets the eligibility criteria, including start-up SMEs that must be within 6 months to 2 years in operations for WCGS-SU.

Yes. SMEs may utilise the GGS for credit facilities up to RM10.0 million. They have to submit a new application to the participating FIs.

If a SME Company is interested with these GGS, please proceed with the following steps:

1. Ensure that their business qualifies for the financing facility by consulting their bankers or any participating FIs in these GGS.

2. Apply for the financing facility at any participating FIs.

3. Provide the necessary documents required by the participating FIs.

4. After the financing facility is approved by participating FIs, copy of the full financing paper will be submitted to SJPP by the FIs for further evaluation to obtain the guarantee cover.

In total, there are 21 participating FIs comprising Commercial Banks, Islamic Banks and Development FIs under the purview of Bank Negara Malaysia.

Please click here for the list of participating Fis

SJPP will issue the approved guarantee cover to the FIs within 10 business days from the receipt of the guarantee application from the participating FIs.

Yes. SJPP will conduct a comprehensive evaluation and review the approved financing papers submitted by the participating FIs.

All documentations are required to be submitted to participating FIs for their evaluation process. Upon approval, the application will be forwarded to SJPP. In the event where more documentations are deemed necessary, SJPP will communicate to the FIs on any additional documentation required.

No. The GGS cannot be used to refinance the existing facility.

GGS are offered to eligible SMEs, and as such SMEs within a Group or Conglomerate that are able to provide funding or can financially support its subsidiaries are advised to obtain funding from within the Group or Conglomerate.

Yes. Under Section 14 of the Financial Procedure Act 1957 (Act 61), a guarantee involving a financial liability on the Government shall bind the Government provided it is entered into with the written authority of the Treasury or in accordance with the federal law.

The Bus and Taxi Hire Purchase Rehabilitation Scheme (BTHPRS) is a special government guarantee scheme to assist eligible bus and taxi operators by providing a loan servicing moratorium of up to 12 months and an extended repayment period to mitigate the impact of the COVID-19 pandemic and MCO on their businesses.

On behalf of the Government, SJPP will provide a guarantee coverage to participating Financiers providing Hire Purchase, Credit Leasing and Services for 50% of the balance outstanding (excluding any penalty interest, late payment charges, other charges and guarantee fee advanced) of the restructured Hire Purchase Facilities by eligible Hirers.

Applications are open until full utilisation of the scheme limit of up to RM1.0 billion only.

BTHPRS is open to all companies, sole proprietorship, partnership, or limited liability partnerships that are at least 51% owned and ultimately controlled by Malaysian citizens; and involved in the operation of charter, tour, interstate, express, stage, school buses, factory buses and taxis.

Other terms and conditions may apply, depending on the Hirer’s profile and credit assessment.

The vehicle life for buses and taxis should not exceed 12 years and 9 years, respectively, at the time of application for the guarantee.

The road tax for the vehicle must have been renewed with an expiry date on or after 30 September 2019, or the vehicle has been inspected by Puspakom Sdn Bhd with a certificate of inspection that is valid on or after 30 September 2019.

BTHPRS can be used for fresh restructured hire purchase facilities for the acquisition of buses (charter, tour, interstate, express, stage school buses, factory buses) and taxis. In this instance, fresh refers to hire purchase facilities that are restructured for the purposes of this scheme.

The existing financing facility to be restructured must not be in arrears for more than 3 months prior to 30 September 2019.

For buses:
The minimum restructured financing limit is RM30,000 (based on the restructured principal amount outstanding) and a maximum of RM10.0 million* per facility.

For taxis:
The restructured financing limit is up to RM5.0 million* (based on the restructured principal amount outstanding) per facility.

*The maximum limit is also subject to the aggregate group limit not exceeding RM10.0 million for the amount to be guaranteed under the existing financing facility upon restructuring; and all other amounts owing by the Hirer and/or the Hirer’s Group under any other loan and/or financing facilities which are guaranteed under the BTHPRS.

The guarantee fee is 0.5% of guarantee cover per annum payable against the guarantee coverage sum. The guarantee fee for the first year of the restructured facility is waived.

For example, Joyful Leisure Tours Sdn Bhd has a restructured principal amount outstanding balance of RM1,000,000, with a cover period of 1 year. The calculation of the guarantee fees are:

(Restructured principal amount Outstanding Balance x Guarantee coverage x Guarantee fees x Cover period)

RM1,000,000 x 50% x 0.5% x 1 year = RM2,500 per annum.

The tenure of the guarantee will depend on the tenure of the restructured financing and must not exceed 9 years.

The guarantee fees will be borne or paid by the Hirer.

No. Hirers must still ensure that they pay all the outstanding balance of their restructured facilities to their Hire Purchase or Credit Leasing Company.

We advise you to discuss with your Hire Purchase or Credit Leasing Company. Applications for BTHPRS will be made by participating Financiers directly to SJPP.

For general enquiries, you may also reach out to us via our website at www.sjpp.com.my or email directly to esjpp@prokhas.com.my. Our representatives will respond to you in a timely manner.

It is compulsory for Hire Purchase or Credit Leasing Companies that would like to provide BTHPRS to their hirers to sign a Master Agreement with SJPP. Please indicate your interest and contact us at esjpp@prokhas.com.my to obtain more information.

Our representatives will respond to you in a timely manner.

A Notice of Termination has to be issued first to the borrower followed by the Claim Notice. Both Notices must be made within the validity period of the Guarantee.

The FIs will submit the claim to SJPP and upon assessment will recommend the claim to the Government of Malaysia for payment.

The Government of Malaysia via SJPP will pay for the claim.

The claim will be paid within 30 days:

• From the date of receipt of the Claim Notice received by SJPP provided that all required documents have been received in full; and
• The stage of the legal action against the borrower is within the level set by SJPP.

Yes. After the Notice of Termination has been issued on the financing facility to the borrower, the participating FIs must proceed with legal proceedings and/ or foreclosure proceedings. At the same time, the participating FIs may submit a Claim Notice to SJPP.

The FIs must continue to recover from borrowers after the Claims have been made. Any proceeds received after the Claims have been made will be shared with SJPP based on the percentage of guarantee cover.