Teraju and SME Bank introduce RM500 mil loan facility

KUALA LUMPUR (July 6, 2012): The Bumiputera Agenda Coordinating Unit (Teraju) will collaborate with SME Bank to set up a RM500 million loan facility to help expand high-performing Bumiputra companies under the Teras programme.

Source From (The Sun Daily): http://www.thesundaily.my/news/427178
Published: Monday July 06, 2012

Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said the Teras Fund, open to all 130 companies under Teras, will be offered a loan facility of up to RM20 million per company to facilitate their business expansion programmes.

The companies, which fall in the small-medium enterprises (SME) category, will be offered the loan to assist business expansion through working capital and asset buying financing.

"We will allocate RM150 million for the working capital lending, for which a company can borrow between RM1 million to RM10 million.

“The RM350 million allocated for the asset buying financing will enable a company to apply for a loan of up to RM20 million.

"We expect a good take-up response from about 130 companies currently under the Teras programme.
“This is because the loans will not have very strict collateral agreements, in contrast with commercial banks," said Nor Mohamed in a press conference after chairing the meeting between Teraju and the country's five economic corridors today.

When asked if there is a mechanism to monitor the repayment of the loans since there will not be much emphasis on placing collateral to obtain the loans, Nor Mohamed said the bank will look into the viability of the projects.

“The lender would definitely want to know if the project is viable. They will look at the cash flow of the companies and if it is alright, then they will approve the loans.

“The reason why the bank wants to start off with the Teras companies is because they have the ratings and track records,” he said.

Apart from that, Nor Mohamed also announced that part of the RM2 billion facilitation fund for infrastructure projects introduced by Teraju and Public-Private Partnership Unit (UKAS) would be made more flexible.

He added that the threshold for companies applying for project finance would be lowered to RM5 million from RM20 million for a RM600mil portion of the total fund.

He said the country's five economic corridors would be allocated RM100 million each and the final RM100 million for Teraju.

“This will allow Bumiputera entrepreneurs to be more competitive,” said Nor Mohamed.