It can be challenging for businesses to obtain financing facilities from financial institutions.
The lack of collateral is often a factor, while high expenditures can also add to the company’s financial burden.
This is where Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) comes in — to help business owners gain access to financing through government guarantee schemes.
About SJPP
SJPP is a wholly-owned company of the Minister of Finance (Incorporated), and was formed to administer and manage government guarantee schemes.
These schemes allow small- and medium-sized enterprises (SMEs) and mid-sized companies (MSCs) to access financing facilities without needing to provide collateral, which is usually the main requirement for financing approval.
The government will then guarantee and protect financial institutions for up to 90% of the total financing amount given to eligible companies.
SJPP manages six main schemes across all industries and sectors:
Additionally, SJPP offers other government guarantee schemes, which include:
- PEMULIH Government Guarantee Scheme (PGGS)
- PENJANA Tourism Financing Facility (PTF)
- Bus and Taxi Hire Purchase Rehabilitation Scheme (BTHPRS)
One of the primary schemes currently being offered by SJPP is PGGS, an all-encompassing scheme for new financing and additional working capital.
What makes PGGS attractive is that any entity, from micro businesses up to MSCs, can apply for it, regardless of industry.
The scheme is open to companies with annual sales not exceeding RM500 million based on audited accounts (or income tax statements, where applicable) for any financial year ending in 2019 or later, that also meet the following criteria:
- Sole proprietorships owned by a Malaysian citizen.
- Partnerships and limited liability partnerships controlled and majority owned by Malaysian citizens.
- Companies with at least 51% of the shares held and controlled by Malaysian citizens.
The applying company must also be registered under one of the following:
- Registration of Business Act 1956
- Companies Act 1965 or 2016
- Limited Liability Partnership Act 2012
- Authorities or District Offices in Sabah and Sarawak
- Statutory Bodies for professional service providers
Other terms and conditions may apply subject to Financial Institutions (FI) and SJPP.
There are a total of 22 participating FIs, including commercial banks, Islamic banks and development FIs under the purview of Bank Negara Malaysia, as well as non-banking financial institutions. Check out the full list here.
How it works:
Companies or businesses interested in applying for these schemes can check their eligibility and submit an application by providing complete documentation to relevant officers at participating FIs.
FIs will assess the applications, and companies or businesses without sufficient collateral or no collateral whatsoever, will have a copy of their application submitted to SJPP.
SJPP will evaluate the applications for the purpose of guarantee approval. A guarantee fee of up to 1% per annum will be imposed on the protection guarantee, which must be paid in advance by the company or business.
Since its inception, SJPP has continued to grow through the announcement of various initiatives from the government that benefit over 60,000 SMEs up to mid-sized companies.
The government, via SJPP, is committed to strengthening cooperation with FIs to provide the best solutions to companies and businesses facing collateral-related challenges.
Through this collaboration, the government aims to reduce financing issues that have been burdening many companies and businesses.
To find out more about the government guarantee schemes offered by SJPP, visit its website.
This article originally appeared on Harian Metro, with rights to be republished on Free Malaysia Today.
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