SMEs employ over 66% of the total working population in Malaysia. They help to drive our economy, and if they suffer, the effects will be heavy and far-ranging.
The government acknowledged the importance of SMEs and announced assistance to SMEs in Malaysia to help tide them over this period.
Besides the government, there is a clear need for financial institutions and banking services to play their role to support these businesses.
HSBC, a bank with more than 150 years of history in Malaysia is also stepping up to help SMEs that are struggling, in 3 ways.
The goal is to be a helping hand and provide the support SMEs need from financing to day-to-day banking.
1. Get a Loan/Financing Deferment
Announced by the Bank Negara Malaysia on Feb 27th 2020 and Prime Minister Muhyiddin Yassin in the PRIHATIN Economic Stimulus Package announcement on March 27th 2020, banking institutions in Malaysia are to offer deferment for all loan/financing repayments for 6 months, starting from April 1, 2020.
Fact to note: A loan deferment basically means that there is a temporary suspension of loan/financing repayment obligation for a limited period of time, and there will be no late payment charges.
Taking this a step further, HSBC will not be compounding interest/profit during the deferment period because the bank understands that every cent matters to the SMEs.
This means that they won’t be charging interest on top of the accrued interest during the deferment period.
According to HSBC, all eligible SME customers are automatically opted into the deferment.
“We empathise with everyone who is currently going through a challenging time here in Malaysia due to the COVID-19 outbreak and therefore we have taken the decision for retail and SME customers—both the interest for conventional loans as well as profit on Islamic financing will not be compounded during the moratorium period, we hope this proactive effort will help ease the financial burden of our retail and SME customers.”Stuart Milne, CEO of HSBC Bank Malaysia
If you’re a larger company and have experienced stress during this period, you can also reach out to HSBC to be included in this deferment. They have an extensive FAQ for the businesses who want to find out more.
2. Apply For Some Quick Financing Solutions
In its efforts to help alleviate the financial burden of SMEs due to COVID-19 outbreak, HSBC has made available the financing solutions offered by Bank Negara Malaysia.
With an allocation of RM13.1 billion1, these are the 5 financing facilities offered:
1) Special Relief Facility
RM5 billion allocated to assist with short-term cash flow issues. SMEs can obtain financing of up to RM1 million for up to 5.5 years, with a 6-month grace period and capped at 3.5% per annum. Available from 6 March 2020 to 31 December 2020.
2) Agrofood Facility
RM1 billion allocated to increase local food production for export purposes. SMEs can get financing of up to RM5 million for a period of up to 8 years. Capped at 3.75% per annum. Available from 6 March 2020 onwards.
3) SME Automation and Digitalisation Facility
RM300 million allocated to incentivise SMEs to improve efficiency and productivity. SMEs can obtain financing of up to RM3 million for a tenure of up to 10 years. Capped at 4% per annum. Available from 6 March 2020 to 31 December 2020.
4) All Economic Sector Facility
Enhanced financing access provided to SMEs with an allocation of RM6.8 billion. Eligible SMEs can obtain financing of up to RM5 million for a tenure of up to 5 years, with a capped rate of 7% per annum. Available from 6 March 2020 onwards.
5) Micro-Enterprise Facility
RM300 million allocated to increase access for collateral-free financing for micro-enterprises. SMEs eligible for this can get up to RM50,000 for a period of 5 years. Financing rate to be determined by HSBC. Available from 6 March 2020 onwards.
HSBC acknowledges the challenging situation of SMEs in these trying times.
They have recently introduced the Simplified SME Financing solution, so SMEs can get quicker access to capital used for day-to-day operations or in setting up new ventures.
These are the 5 main benefits of HSBC’s Simplified SME Financing:
- High Financing Limit: Get access of up to RM2 million for your business needs
- Expedited Approval: Quicker approval process to get ahead during these uncertain times
- Attractive Rates: Get cash flow with competitive profit rates
- Tangible-collateral free: Focus on what matters without tangible collateral*
- Flexible Repayment: Get a flexible repayment schedule for up to 5 years with no penalty for early repayment
*A guarantee from Syarikat Jaminan Pembiayaan Perniagaan (SJPP) is required.
3. Manage Your Business Finances Online
With the MCO in place, people aren’t allowed to go about just like they previously could. Even after the MCO lifts, many might still be reluctant to move around too much outside.
HSBCnet, the Bank’s digital banking platform can help SMEs to manage their business finances remotely and keep your business running under any circumstances.
It can be used anytime and anywhere, and was designed to simplify banking processes for SMEs.
The platform allows SMEs to handle operations ranging from payment to staff, providing real-time access to manage trade transactions, bulk payments to customised payment reports.
For example, if you’re still relying on banking cheques to pay your employees, HSBCnet allows businesses to transition to making online payments to staff.
On the platform, customers can also view live foreign exchange rates when making international payments and transfers. GetRate, HSBC’s foreign currency platform, can also help SMEs with features that’ll reduce currency costs and mitigate foreign exchange risk.
HSBC has stood shoulder-to-shoulder with Malaysians through ups and downs. The current situation is no different. HSBC understands that many business owners find themselves in a very challenging situation and is ready to help.
With these solutions, HSBC wants businesses owners to know that they are here to provide the support you need through this journey.
With the loan deferments as well as other financing services, that takes the pressure off the business owners who are now going through a very challenging period and trying to maintain business survival.
1. Bank Negara Malaysia Press Release 27th March 2020
Featured Image Credit: HSBC