There are many loan packages offered by local banks and financial assistance schemes guaranteed by BNM. I am going to touch on the following 2 schemes promoted by BNM due to their attractive terms :
- SAGS - this scheme is guaranteed by CGC and each borrower is entitled to a maximum combined limit of RM 500,000 granted by multiple banks with interest rate determined by lending bank and no guarantee fee is imposed. Although BNM do not requires borrower to come out with any collateral to secure this loan, some banks are actually requesting 20% fixed deposit from borrowers as additional comfort as CGC only provides 80% guarantee cover. Loan structure offered under scheme include term loan, overdraft and trade line. However, not all banks are offering such structure to borrowers. For example, OCBC & StanChart are offering only term loan under the scheme (without collateral), whereas other banks are offering tradeline and overdraft depending on borrowers' requirement (with and without collateral).
- WCGS - this scheme is guaranteed by SJPP (a special vehicle incorporated to administer the fund) and each borrower is entitled to a maximum limit of RM10 mil. BNM has fixed the interest rate for this scheme at BLR+1%, plus 0.5% guarantee fee on guarantee amount. However, banks are not eager to lend out this sum although SJPP provides 80% guarantee cover. Again, although BNM does not requires borrowers to come out with any collateral, certain banks are actually requesting collateral from borrowers for same reason above. Loan structure is general similar to SAGS above. Due to overwhelming response, BNM had increased the loan size from RM5 bil. to RM7 bil. and this loan is going fast.
The tenure for both schemes above is 5 years. Term loan borrowers repay the term loan amount over 3 to 5 years and tradeline/overdraft borrowers are subject to limit reduction on quarterly or half-yearly basis or to provide sinking fund as collateral up to the loan limit.
