SME Bank or Bank Perusahaan Kecil dan Sederhana exists since a couple of years ago (2005 in exact) and the objective of the establishment is to help developing Small Medium Enterprises (SMEs) in Malaysia. SME Bank also acts as a one-stop financial solution provider for aspiring businessmen.
If you thought of quitting your job and secure financial loans for your start up business then SME Bank’s help can be handy.
The Definition of an SME
Before you approach the SME Bank, you must understand the definition of Small Medium Enterprise (SME) itself. A business is only eligible for financial assistance from the SME Bank if it falls within the SME category. A few factors that govern the classification of business as an SME are number of employees, industry and total sales/revenue of the company. An SME will be also further categorized as Micro, Small or Medium SME.
Before this, no standard definition of SME was established and as such, different agencies have been defining SMEs according to their own criteria. In June 2005, The National SME Development Council announced the official and common definition of SMEs. It was documented into a 14-page PDF file. You can download the PDF file here to study the definition and criteria. Otherwise, if you want a shorter version, click the summarized definition of SME from SME Info.
Various Financial Helps Available
SME Bank’s financial assistance or loans are eligible for start-up businesses as well as those wanting to expand their existing operation. But it does not stop there as the bank also offers financial aids for franchise businesses too. This is a program coordinated by PNS (Permodalan Nasional Berhad) with the help of SME Bank as a partner.
The franchise financial program is not limited to franchisees (e.g. if you want to open up a KFC or a 7-Eleven) but also applicable if you plan to bring an oversea franchise business into this country (hence you become the master franchisee) or if you’re running a successful SME and plan to franchise your business (you become the franchisor). More info on SME Franchise is available here.
SME Bank works closely with other government bodies and agencies such as MARA (Majlis Amanah Rakyat), MEDEC (Malaysia Entrepreneur Development Center), MECD (Ministry of Entrepreneur and Co-Operative Development) and others in a synergized effort to develop and organize development programs for entrepreneurs.
Also, under a program called SME Professional, the SME Bank extends financial aid for those graduates or professionals (e.g. doctors, lawyers, chartered accountant and so on) who wish to start their own practice. The SME Professional is a partnership program between the SME Bank, CIMB Bank, MARA and PUNB.
How Much Money You Can Get?
The amount of the financial loan eligible depends on certain criteria, and will be mainly defined by your SME category e.g. Micro, Small or Medium. Roughly, a Micro SME can get up to RM500,000 loan (this is already a lot, folks!), Small SME RM5 million and Medium SME RM 10 million. However, this is just a rough guideline and may change depending on circumstances.
What do I need to do before getting the financial loan from SME Bank?
A business plan. That’s right. The SME Bank officers usually refer a business plan as an RP, or Rancangan Perniagaan. This will not be covered today but in one of the future postings since this will be another lengthy write-up. If you are new to this blog, you can subscribe to our future postings through here.