RM365m MIDF loans for SMEs

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/midfad2/Article/index_html

Published: 19 April 2012
By Adeline Paul Raj

ECONOMIC DEVELOPMENT: Bulk of financing will be skewed towards services sector
MALAYSIAN Industrial Development Finance Bhd (MIDF) plans to extend RM365 million in soft loans to small and medium enterprises (SMEs) this year as it looks to help the government develop key sectors of the economy.

The amount is about a third more than the RM280 million it channelled out last year, group managing director Datuk Mohd Najib Abdullah said.

"We've already secured the funds from the government," he told Business Times in an interview.

MIDF's areas of focus for SMEs have changed over the years, adapting to meet the country's needs.

Of the RM365 million, the bulk (or RM213 million) will be given out to qualified SMEs "skewed towards the services sector", he said, while RM92 million will be for the automotive sector, and the balance RM60 million, for automation and modernisation.

Last year, the bulk of its loans was also for the sevices sector.

MIDF was established 52 years ago, in March 1960, to ensure access to financing for manufacturing-based SMEs.

In the last three years, however, in line with the government's efforts to increasingly rely on the services sector - and less on manufacturing - to drive the economy, MIDF started turning its focus towards the needs of service-based SMEs.

Mohd Najib said MIDF still has an important role to play in the economy despite there being eight local banks and several other foreign lenders that have mushroomed over the years that also service the SME segment.

"As you start restructuring the economy, you will find that the country needs certain sectors to be pushed, to take priority. For example, when the government wanted to restructure the auto industry, MIDF came in and started to lend to this industry. Even now, with the revised National Automotive Policy coming out, there's going to be a second round to prepare for, so we'll see what role we can play with that.

"Now, as the country moves towards the services sector, there is a need for that sector to get develop-ment financial assistance, and that's where our role comes in," he remarked.

He noted that one of the problems the services sector faces today is "having their own premises", and so MIDF is now developing a programme that would enable them to buy premises for their own use.

Besides development finance, MIDF is also involved in investment banking, which is its most profitable business, as well as asset management.

MIDF will from tomorrow be participating in the 13th Minggu Saham Amanah Malaysia (MSAM), an annual event organised by its parent company Permodalan Nasional Bhd. This year, it will be held in Kota Kinabalu, starting tomorrow to April 28.