Bank Negara Malaysia (BNM) will provide an additional RM2.5 billion in financing through banks and financial institutions to support micro, small, and medium enterprises. This brings the total size of its SME financing funds to RM34.9 billion.

The latest allocation is aimed mainly at first-time borrowers, including new and early-stage businesses that may face difficulties securing loans under standard banking requirements.

RM32.4 Billion Already Channelled To SMEs

To date, BNM has made RM32.4 billion available in concessional financing to support small and medium enterprises through participating financial institutions.

The support focuses on viable micro and small businesses that face financing constraints, such as limited credit history, insufficient collateral, or cash flow challenges.

Shift Towards Guarantee-Based SME Loans

As part of efforts to reach a wider group of businesses, the central bank plans to transition towards a guarantee-based support model for SME financing. Under this approach, up to RM10 billion in SME loans will be backed by guarantees.

The scheme will be implemented in collaboration with Credit Guarantee Corporation Malaysia Bhd. By sharing lending risks with banks, the model is intended to make financing more accessible for first-time borrowers and smaller enterprises.

How Risk Sharing Helps Small Businesses

Under a guarantee-based structure, a portion of the loan risk is borne by the guarantor rather than the bank alone. This reduces the risk for lenders and increases their willingness to approve loans for businesses without long operating histories or strong collateral.

For small business owners, this can translate into higher approval chances and more affordable financing terms.

Fund For SMEs Covers Multiple Sectors

BNM’s Fund for SMEs provides concessional financing to businesses across a wide range of sectors. The fund has been enhanced to support business recovery, growth, and long-term resilience.

Areas covered include high-technology and green projects, low-carbon transition initiatives, automation and digitalisation, agrofood activities, micro enterprises, and tourism. The fund also includes relief and adaptation support for affected businesses.

What This Means For Business Owners

For micro and small business owners, especially those applying for financing for the first time, the expanded fund and upcoming guarantee-based model may improve access to funding.

The initiatives are part of BNM’s efforts to strengthen SME financing, support entrepreneurship, and promote sustainable business growth. All programmes are implemented through participating financial institutions, and eligibility criteria are set by the respective lenders.

Follow us on our official WhatsApp channel for the latest money tips and updates.