Bank Islam Malaysia Bhd yesterday signed a Memorandum of Understanding with Petroliam Nasional Bhd and Syarikat Jaminan Pembiayaan Perniagaan Bhd to provide financial solution to PETRONAS vendors nationwide via SME Vendor Financing Programme aimed at benefitting the local Oil & Gas Services and Equipment (OGSE) sector.
With the aim of improving access to financing and liquidity to the OGSE players, Bank Islam, PETRONAS and SJPP collaborate via the SME Vendor Financing Programme, open to Malaysian SMEs, which have contracts with PETRONAS and are in compliance with Bank Islam’s credit assessment and SJPP’s eligibility and criteria.
Signing on behalf of PETRONAS was the Vice President of Group Procurement, Samsudin Miskon and Bank Islam was represented by the Head of Commercial Banking, Abdul Rashid Abdul Hamid. SJPP was represented by its Senior General Manager, Chen Yin Heng.
The signing ceremony was witnessed by Tan Sri Wan Zulkiflee Wan Ariffin, President and Group Chief Executive Officer of PETRONAS; Khairul Kamarudin, Chief Executive Officer of Bank Islam and Dr. Nungsari Ahmad Radhi, Principal Officer of SJPP.
Khairul said, “Bank Islam has been taking realistic approach towards designing innovative products to meet the need of the Small Medium Enterprises (“SMEs”). Through this partnership, we are able to serve the real economy which represents one of our value-based intermediation initiatives as well as to support the government’s initiative to enhance and stimulate the SME business growth in this country. We are also committing ourselves to looking after the larger enterprises and communities, thus contributing towards economic resiliency and social wellbeing.”
PETRONAS Senior Vice President of Project Delivery & Technology, Mazuin Ismail said: “PETRONAS initiated this collaboration as part of the many efforts undertaken to sustain and maintain the resiliency of the Malaysian OGSE sector. We value the partnership that we have entered today with Bank Islam and SJPP which we believe will ease the challenges faced by the OGSE vendors.”
As part of the initiative, SJPP, a wholly owned agency under the Ministry of Finance, will act as the credit guarantee provider. SJPP will support the programme by providing up to 70 percent credit guarantee to eligible OGSE SME vendors in obtaining financing facilities. As a collaboration partner, PETRONAS’ role is solely to promote the financing facility to its SME vendors, as well as validate the vendors’ information and contracts.
Dr. Nungsari said, “The Government is committed to support the SME businesses and has been providing continuous support in developing SMEs via various initiatives, products and services, including the various Government guarantee schemes managed by SJPP. To date, 15,780 SMEs have benefited from the various schemes under SJPP. We welcome any collaboration with Financial Institutions (“FIs”) and other parties that can fit our mandate to assist and reach out as many SME market players as possible since SME industry is targeted to contribute 41% towards the economy by 2020 as stated in the SME Masterplan.”
SMEs makes up 97% of total business establishment in Malaysia and 65% of Malaysia’s employment. This segment contributes 36% of Gross Domestic Product (GDP) of the country and 18% of Malaysia’s export. As at March 2018, Bank Islam has financed 1,235 SME customers with a total financing of approximately RM2.9 billion.
