EXIM Lending a Helping Hand to Cash-Strapped SMEs
RM300 Million Channelled Through JanaNiaga to Aid Cash Flow-Strapped Two Million SMEs
(From right) Finance Minister of Malaysia, Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz and EXIM Bank’s Officer-In-Charge Mr Chin Chon Young at the virtual launch of JanaNiaga
Export-Import Bank of Malaysia Berhad (“EXIM Bank”) recently unveiled the JanaNiaga digital platform that will aid cashflow-strapped small and medium enterprises (SMEs) that supply goods and services to the government and government-linked entities or companies (GLCs).
Seen as the National Supply Chain Finance platform, JanaNiaga will aid SMEs that supply to government and GLCs to obtain access to financing at an attractive rate as low as 3.5 per cent a year with a financing margin of almost 100 per cent, which is deemed far lower than the current financing available. Such a facility will help ease SMEs’ cash flow and improve the liquidity of these businesses.
This initiative was first announced by the government in the Budget 2021 as a national agenda. JanaNiaga is spearheaded by EXIM Bank with a funding of RM300 million and is expected to benefit more than two million SMEs, namely those who are involved in the supply chain or vendor ecosystem to GLCs. The funding to SMEs is expected to reach RM1.2 billion with additional funding from financial institutions, who will be participating in the JanaNiaga platform in various phases.
For a start, Petroliam Nasional Bhd (PETRONAS) and Telekom Malaysia Bhd (TM) will be onboard the platform. In the near future, the JanaNiaga platform will be extended to include vendors to the Ministries, other government agencies and GLCs.
JanaNiaga is set to provide easy access to funds via digital financing, with faster approval, as well as easy documentation. Leveraging on digitalisation, JanaNiaga facilitates easier online application submissions, faster approvals and disbursements in less than 24 hours.
The Honourable Finance Minister of Malaysia, Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz said: “Financial liquidity is of utmost importance to the survival of SMEs during this challenging pandemic times. The JanaNiaga platform brings together multiple parties into a national ecosystem of supply chain vendors. This will enable an efficient cash flow for access to financing for SMEs’ working capital in the country with the availability of this RM300 million allocation.
“It is the Government’s fervent hope that JanaNiaga will assist SMEs who have been adversely affected by the COVID-19 pandemic, as well as support the recovery and rejuvenation of businesses and the economy of the country. This is in line with the government’s automation and digitalisation strategy to accelerate the transformation of the country towards a high-income economy,” he further added.
EXIM Bank’s Officer-In-Charge Mr Chin Chon Young said: “The last few months saw EXIM Bank working on Jana Niaga, a holistic financing centralised infrastructure, which is able to connect to key supply chain databases in Malaysia. We are laying the foundation for new funding sources to be injected to revitalise the economy in the many years to come. This initiative is a sustainable form of financing that will help SMEs recover from the COVID-19 pandemic and give a growth boost post-pandemic.”
EXIM Bank has also been collaborating with several banks that have indicated strong interest to finance this innovative program as Supply Chain Finance has gained prominence in the global finance system as a means for economic recovery. In addition, the multi-bank approach was an enhanced feature that is preferred by many GLCs and large corporates that helps to stabilise the funding access.
Amongst the other financial institutions that will be onboard JanaNiaga to assist in financing SMEs are Maybank, CIMB, Bank Muamalat Malaysia Berhad, HSBC and Standard Chartered.
Over time, Jana Niaga is expected to widen its network of both financiers and paymasters, as well as be a catalyst towards the introduction of other technology-driven solutions. This revolutionary platform will surely aid the underserved SME segment in the country, as we support the national agenda, while also limiting credit risks to the financing fraternity.
