NEW BRF AND LCTF FINANCING FACILITIES OPEN FOR APPLICATION FROM FEB 3 - BNM

KUALA LUMPUR, Jan 21  -- The RM1 billion Business Recapitalisation Facility (BRF) and RM1 billion Low Carbon Transition Facility (LCTF) as announced during Budget 2022 will be opened for application from Feb 3, 2022 until the funds are fully utilised, said Bank Negara Malaysia (BNM).

In a statement today, it said BRF aims to support SMEs to recover and grow, while managing their level of indebtedness through innovative financing solutions.

"Under BRF, small and medium enterprises (SMEs) may obtain equity financing through the issuance of preference shares, common shares, or any suitable equity-like instruments; or a  mix of debt financing from participating financial institutions (PFIs) and equity financing through third party equity financiers (blended finance),” it said. 

The central bank said BRF will be available for SMEs of all economic sectors, up to a maximum of RM5 million, for financing working capital and capital expenditure, with the tenure of financing of up to 10 years.

For a mix of debt financing, BNM said the effective rate for debt financing under BRF is up to 3.5 per cent per annum for financing without guarantee, or up to 5.0 per cent per annum inclusive of any guarantee fee.

"Interested SMEs can apply directly from participating commercial banks, Islamic banks and development financial institutions regulated by BNM,” it said.

BNM governor Tan Sri Nor Shamsiah Mohd Yunus said more innovative financing solutions such as blended finance and equity financing, pool together resources, capacity and knowledge across the public and private sectors comprising banks, development financial institutions and equity investors enable businesses to build back better in the post-pandemic landscape.

As for LCTF, BNM said the facility supports and encourages SMEs to adopt sustainable practices for business resilience, in which financial institutions will match LCTF with RM1 billion of their own funds.

The central bank said these sustainable practices include, but are not limited to obtaining sustainability certification, increasing use of sustainable materials for production, improving energy efficiency of building and appliances, and installing on-site renewable energy generation equipment.

The LCTF is available for SMEs of all economic sectors, up to a maximum of RM10 million, for financing working capital and capital expenditure, with the tenure of financing of up to 10 years.

"The financing rate is up to 5.0 per cent per annum, inclusive of any guarantee fee,” it said.

BNM said interested SMEs may apply directly from participating commercial banks, Islamic banks and development financial institutions regulated by the central bank.

"There is an urgent need for SMEs to adopt sustainable practices in their business operations moving forward,” said Nor Shamsiah. 

She said the LCTF encourages and supports the financial industry to innovate their product offerings to facilitate businesses to embed sustainability and recalibrate their business operations and processes.

Besides that, the central bank also said that it has recently increased the allocation for Disaster Relief Facility 2022 (DRF 2022) by RM300 million, bringing the total allocation to RM500 million.

"Eligible SMEs and micro enterprises will now be able to obtain financing up to RM700,000 per SME and up to RM150,000 for micro enterprises,” it said, adding that the financing tenure has been extended up to seven years.

It noted that SMEs may contact BNM at bnm.my/LINK for more information on the DRF.

"SMEs may also access other facilities available under BNM’s Fund for SMEs at bnm.gov.my/sme-financing,” it added.

-- BERNAMA