Bank Muamalat gets kafalah guarantee on SME financing from PUNB

Bank Muamalat Malaysia (Bank Muamalat) signed an MOU with Perbadanan Usahawan Nasional (PUNB), Malaysia's national entrepreneur development corporation, in early December to establish a kafalah guarantee scheme under which PUNB will provide a financial guarantee to Bank Muamalat with respect to advances, credit facilities or financing provided by Bank Muamalat to established SMEs.

With the collaboration, Bank Muamalat will work together with PUNB to play an important role in the development of business community, especially for SMEs in Malaysia. The partnership with PUNB will allow the bank to add to the pool of credit available for SMEs in line with government aspirations. Bank Muamalat and PUNB also agreed to collaborate and participate in entrepreneur development activities such as joint training programmes, workshops, business matching and related activities for the benefit of SMEs. 

The bank has also enhanced its SME portfolio through its full-fledged Islamic banking platform.

Bank Muamalat launches BizSTAR-I SME financial package

Islamic bank Bank Muamalat Malaysia has announced it will extend RM200 million in new financing to small and medium sized corporations by 2015 through Muamalat BizSTAR-I, a financial package based on the concept of tawarruq* with a combination of Property Financing-i Tawarruq and MCash-i products. This product is designed to cater for either financing or refinancing of business premises and to support SME corporations to own business premises.

Y.Bhg. Dato’ Hj. Mohd Redza Shah Abdul Wahid, Chief Executive Officer of Bank Muamalat  said, “As the economy becomes more sophisticated, so will the requirements of the SMEs. One of the major levers of growth for the SME sector is access to financing and financial institutions therefore have an important role in the ecosystem for financing to SMEs.

“Business premises financing products are amongst the most popular financing products for SMEs, having grown from RM87.1 billion in 2003 to RM217.2 billion in 2012.”

Key features of Muamalat BizSTAR-I:

• Business property financing package based on shari'ah concept of tawarruq with a combination of Property Financing & Mcash-i (working capital requirement).
• The product package is designed to cater for the purchase of business premises and to provide cash financing for customers’ working capital.
• Financing limit from RM150,000 to RM5 million.
• Margin of financing (MOF) of up to 105% where 90% is for property financing,
10% for an MCash facility (working capital) and 5% for moving cost related expenses (MCRE) which includes mortgage reducing term takaful and credit level term takaful, legal costs and valuation costs.
• Tenure of financing is a maximum of 15 years for property financing and five years for the Mcash facility and subject to review.
• Competitive profit rate spread for property financing.

Bank Muamalat has a network of 59 branches (including 6 kiosks), in addition to its electronic channel, encompassing i-Muamalat, the Bank’s Internet banking solution, and e-Muamalat, available at almost 240 locations, referring to its network of ATMs, CDMs, and CDTs.

*A discussion of tawarruq can be found here and here.