MIDF GOVERNMENT FINANCIAL ASSISTANCE PROGRAMMES BY DEVELOPMENT FINANCE

MIDF GOVERNMENT FINANCIAL ASSISTANCE PROGRAMMES BY DEVELOPMENT FINANCE DIVISION 1

Presentation Outline MIDF in brief Products & Services Government Financial Assistance Programmes 2

MIDF in brief Ø Incorporated on 30 March 1960. Ø Mandated role in helping, developing and improving the manufacturing sector in Malaysia. Ø Merged with Amanah Capital Partners Berhad in February 2003. Ø Wholly-owned by Permodalan Nasional Berhad (PNB) since February 2008. Ø 3 core business units: i) Development Finance Division; ii) MIDF Amanah Investment Bank Berhad; and iii) MIDF Amanah Asset Management Berhad. 3

FOCUS OF MIDF via Development Finance Division Ø Ø Provides medium and long term financing for new projects, expansion, automation, modernisation and relocation programmes. Ø Provides both Conventional and Islamic financing (Shariah -based) products. Ø 4 MIDF is one of the agencies under MITI whose main role is to manage government scheme funds via providing financial assistances to SMEs and Non-SMEs. Main focus is developing the manufacturing and services sectors in Malaysia.

An Integral Part Of MITI GOVERNMENT FINANCIAL ASSISTANCE PROGRAMMES MIDF collaborates with MITI and its Agencies as a conduit for assisting specific sectors and/or industries in the economic structure targeted by the Government. 5

Roles & Functions of MIDF v v Credit evaluation of financing applications. v Disbursement of approved financing facilities. v Loan collection and supervision efforts. v Loan recovery processes (if any) v 6 Promotional/marketing activities. To maintain close relationship with business communities and relevant government agencies through various outreach programmes & dialogues.

MIDF Products & Services 7

MIDF PRODUCTS & SERVICES Working Capital Financing Leasing / IHP Facility Project Financing MIDF Property Mortgage Financing 8 Machinery / Equipment Financing

MIDF PRODUCTS AND SERVICES Project Financing Purpose: Loan Tenure: Up to 25 years (inclusive grace period). Margin of Financing: 9 Financing of industrial/commercial land, construction of building, renovation of factory/business premises and machinery & equipment. Up to 90% of the cost of the project.

MIDF PRODUCTS AND SERVICES Property Mortgage Financing Purpose: Financing of industrial / commercial land / construction of building / ready-built industrial and commercial premises. Loan Tenure: Up to 25 years (inclusive grace period). Margin of Financing: Up to 90% of the cost. 10

MIDF PRODUCTS AND SERVICES Machinery or Equipment Financing Purpose: Purchase of Machinery or Equipment. Loan Tenure: Up to 7 years (inclusive grace period). Margin of Financing: Up to 90% Equipment; of the cost of new Machinery or Up to 65% the cost of used/refurbished machinery or equipment (not more than 5 years). 11

MIDF PRODUCTS AND SERVICES Leasing / Industrial Hire Purchase Facility Purpose: Financing for machinery or equipment Loan Tenure: Up to 7 years (inclusive grace period). Margin of financing: Up to 90% of the cost of new Machinery or Equipment; Up to 65% the cost of used/refurbished machinery or equipment (not more than 5 years) 12

MIDF PRODUCTS AND SERVICES Working Capital Financing Sales Revolving Credit (SRC) • Financing invoices Purchase Revolving Credit (PRC) • Financing purchase of raw material up to 100% Working Capital Term Loan • Financing purchase of raw material / consumables up to 90% 13 up to 80% of sales

Government Financial Assistance Programmes 14

Development Finance Division (DFD) Government Financial Assistance Programmes managed by MIDF are: - v v Soft Loan Scheme for Services Sector Capacity Development (SLSCD) v Soft Loan Scheme for Automation & Modernisation (SLSAM) v 15 Soft Loan Scheme for Small & Medium Enterprises (SLSME) Soft Loan Scheme for Services Sector (SLSSS)

Soft Loan Scheme for Small & Medium Enterprises (SLSME) Ø Financing existing SMEs as well as new SMEs in project, fixed assets and working capital financing. Ø Eligibility: SMEs incorporated under the Companies Act 1965 or Registration of Business Ordinance 1956; v at least 60% equity held by Malaysians; v If related to a public-listed company with shareholding not exceeding 20%; and v Possess valid premises license. v Ø Sectors: Manufacturing v Manufacturing Related Services v Services (excluding insurance and financial services) v 16

Soft Loan Scheme for Small & Medium Enterprises (SLSME) Ø Financing Amount: Minimum : RM 50, 000 v Maximum : RM 5 million v Ø Eligible expenses: v Industrial/commercial land, construction of building, renovation of factory/business premises, ready-built industrial or commercial premises, machinery & equipment and working capital financing. Ø Margin of Financing (Fixed Assets) Up to 90% of the cost for new fixed assets; and v Up to 65% for used/reconditioned equipment which shall not be more than 5 years old. v Ø Margin of Financing (Working Capital) v 17 Up to 100% of the working capital requirements.

Soft Loan Scheme for Small & Medium Enterprises (SLSME) Ø Payback Period v Land Building - Up to 25 years including grace period; v Machinery and Equipment - Up to 7 years including grace period; v IT Equipment - Up to 4 years including grace period; Revolving Working Capital – Up to 150 days ( subject to yearly review); and v Term Working Capital - Up to 3 years including grace period. v Ø Interest / Profit Rate : 4% per annum. 18

Soft Loan Scheme for Services Capacity Development (SLSCD) Ø To assist services companies and enterprises to undertake upgrading and modernisation for diversifying into higher value-added activities; and Ø To improve the productivity and efficiency of service delivery in facing liberalisation. Ø Eligibility: Companies/enterprises registered under; - the Companies Act 1965; - the Registration of Businesses Act 1956; - Certificate(s) of Practise with Professional Regulatory Bodies. ~ At least 60% equity held by Malaysians; ~ Possesses a valid premises license; ~ In operation for at least 2 years; and ~ Annual turnover exceeding RM 200, 000/- and full-time employees exceeding 5. ~ 19

Soft Loan Scheme for Services Capacity Development (SLSCD) Ø Sector: Services (excluding financial, insurance, utility and construction). Ø Financing Amount: − Minimum : RM 50, 000 − Maximum : RM 5, 000 Eligible expenses: ü Expenditure to be incurred for upgrading and modernisation including the purchase of equipment, hardware and software as well as related cost for the purposes of diversifying into higher – added activities, and improving productivity and efficiency of service delivery. Ø 20

Soft Loan Scheme for Services Capacity Development (SLSCD) Ø Payback Period: - Up to 7 years inclusive grace period of up to 24 months. Ø Margin of Financing: - Up to 90% of eligible expenses. Interest / Profit Rates: - 4. 0% per annum for SMEs - 5. 0% per annum for non-SMEs Ø 21

Soft Loan Scheme for Automation and Modernisation (SLSAM) Ø Sector: Manufacturing Ø Eligibility: Companies incorporated under the Companies Act 1965 with: v at least 51% equity held by Malaysians; v possess a valid business license; and v in operation for at least 2 years. Ø Financing Amount: Minimum : RM 50, 000 Maximum : RM 10, 000 22

Soft Loan Scheme for Automation and Modernisation (SLSAM) Ø 23 Margin of Financing v Up to 70% for mergers and acquisition v Up to 90% for financing of factory / building v Up to 90% for new machinery and equipment, moulds, dies, jigs and fixtures v Up to 65% for used / reconditioned machinery and equipment v Up to 90% for other eligible expenses v Up to 100% for financing existing loan principal amount with other financial institutions (existing factory building /machinery/ equipment / moulds / dies / jigs / fixtures) v Working Capital Financing: § Up to 100% for Purchase Revolving Credit § Up to 90% for Sales Revolving Credit § Up to 90% for Term Working Capital Financing

Soft Loan Scheme for Automation and Modernisation (SLSAM) Ø 24 Payback Period v Factory / Building – Up to 25 years including grace period of up to 2 years v Machinery and Equipment – Up to 7 years including grace period of up to 1 year v Revolving Credit – Up to 150 days for each drawdown including an option to rollover for a period not exceeding 60 days v Term Working Capital Financing and other eligible expenses – Up to 3 years including a grace period of up to 6 months v IT hardware / software financing – Up to 4 years including grace period of up to 1 year

Soft Loan Scheme for Automation and Modernisation (SLSAM) Ø Interest / Profit Rate: - 4% per annum (SMEs) - 5% per annum (Non-SMEs) Ø Eligible expenses: i. Automation ii. Rationalisation of Operations which also includes the facilitation of the Joint-Venture / Technical Partnership and equipment iii. Tooling Acquisition, Development & Production iv. Productivity Improvement v. Export Enhancement Programme 25

Soft Loan Scheme for Services Sector (SLSSS) Ø Financing assistance for: v Ø Services-based companies / business entities to own commercial or industrial properties. Eligibility Criteria: Companies incorporated under the Companies Act 1965 or enterprises registered under the registration of Businesses Ordinance 1956 or services providers registered under the Certificate of Practice by any Professional Regulatory Bodies. v At least 60% equity held by Malaysians. v Possesses a valid premises licence. v To be occupied by services providers to conduct their businesses. (Acquisition of properties for speculative investment purposes will not be eligible for financing) v 26

Soft Loan Scheme for Services Sector (SLSSS) Ø Sector: Services (excluding financial, insurance, utilities and construction sectors) Ø Financing Amount: Up to a maximum of RM 5 million. Ø Eligible Items: v Commercial and industrial land & buildings / ready-built or to-be constructed premises. 27

Soft Loan Scheme for Services Sector (SLSSS) Ø Ø Tenure of Financing: Up to 15 years including a grace period of up to 2 years. Ø 28 Percentage of financing: Up to a maximum of 100% Interest / Profit Rates: v 4. 0% per annum for SME v 5. 0% per annum for non-SME

Advantages of MIDF’s Government Financial Assistance Programmes Why MIDF? ? ? Ø Low Interest/Profit Rates (as low as 4% per annum) Ø Fixed Interest/Profit Rates Ø Grace Period Ø Available also for Start-Up Companies Ø Capacity building purposes. 29

How To Contact MIDF Main Office Development Finance Division Level 15, Menara MIDF 82, Jalan Raja Chulan 50200 Kuala Lumpur Tel : 03 - 2173 8888 Fax No : 03 - 2772 1911 E-mail : inquiry-feedback@midf. com. my Website: http: //www. midf. com. my 30

MIDF Regional Offices 1. Northern Region Branch, Georgetown, Pulau Pinang. Tel : 04 -2298434/435/436 2. 3. Eastern Region Branch, Kota Bharu Tel : 09 -7483546, 09 -7461679 4. Sabah Branch, Kota Kinabalu Tel : 088 -211633, 088 -211523 5. 31 Southern Region Branch, Johore Bahru Tel : 07 -2232727, 07 -2243046 Sarawak Branch , Kuching Tel : 082 -254533, 082 -254203

THANK YOU 32