Budget 2022: Allocation for BNM's fund for SMEs increases by RM4.5 bln

KUALA LUMPUR: The allocation for Bank Negara Malaysia's (BNM) Fund for small and medium enterprises (SME) will be increased by RM4.5 billion under Budget 2022.

"BNM will make various enhancements to its Fund for SMEs to support businesses impacted by the pandemic," the central bank said in a statement today.

It said RM2 billion would be added to the Targeted Relief and Recovery Facility, bringing the total allocation to RM8 billion, while the Agrofood Facility would be upsized by RM500 million, raising the total allocation to RM2 billion.

Meanwhile, two new facilities would be created and available from January 2022, it said.

It said a RM1 billion Business Recapitalisation Facility (BRF) will be created to strengthen the capital structures of businesses.

"This facility will help businesses seek financing while better managing their indebtedness levels to be more sustainable," it said.

BNM said under the BRF, SMEs may obtain either financing in the form of equity or equity-type instruments, or debt financing combined with equity in partnership with third-party equity financiers.

Another new facility is a RM1 billion Low Carbon Transition Facility, which will be established on a matching basis by participating financial institutions to help SMEs embrace sustainable and low carbon practices in their business operations.

This includes to increase usage of sustainable raw materials and renewable energy, and to also improve energy efficiency of buildings or machinery, it added.

Budget 2022 was unveiled by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz in Parliament earlier today.

-- BERNAMA