1. Enhancements to Financing Facilities to Assist Affected SMEs, Safeguard Jobs and Support Growth
(1) An increase in the allocation of the SRF(Special Relief Facility), from RM2 billion to RM5 billion, to provide relief assistance to more SMEs who are affected by the COVID-19 outbreak. The maximum financing rate is now lowered from 3.75% p.a. to 3.50% p.a. The enhanced SRF is available until 31 December 2020.
(2) An increase in the allocation of the AES(All Economic Sectors) Facility, from RM5.8 billion to RM6.8 billion, to enhance access to financing for SMEs and to support growth. The maximum financing rate is also reduced from 8% p.a. to 7% p.a.
(3) In addition to the above, SMEs can also avail themselves to 3 other facilities under the Fund, namely the ADF(Automation and Digitalisation Facility), AF(Agrofood Facility) and MEF(Micro Enterprises Facility). The SRF, AF and ADF were announced as part of the first economic stimulus package on 27 February 2020. Since these facilities were made available on 6 March 2020, participating FIs have approved a total of RM119million of financing to 196 SMEs, with an approval rate of 84%.
2. Programme to Support the B40 Segment in Generating Sustainable Income and Achieve Financial Resilience(iTEKAD)
To further facilitate access to funding and help build entrepreneurship capability among B40 micro-entrepreneurs, a social finance programme will be introduced by participating Islamic banks in collaboration with some SIRCs(State Islamic Religious Councils) and implementation partners.
Social finance(zakat, waqf and sadaqah) offers significant potential to facilitate the distribution of funds in a more balanced and inclusive manner. The programme is designed to mobilise social finance contributions towards providing seed capital that is packaged with microfinancing for eligible micro-entrepreneurs to start and grow business to generate sustainable income.
As a start, BIMB(Bank Islam Malaysia Berhad) will be the first participating Islamic bank to pilot the iTEKAD programme beginning May 2020. The initial programme optimises zakat and microfinancing arrangement and will include cash waqf at the later stage. The implementation of the programme involves onboarding and educating recipients as well as monitoring their success which will be undertaken in collaboration with MAIWP(Majlis Agama Islam Wilayah Persekutuan) and SME Corp(SME Corporation Malaysia). In addition to obtaining funds to start the business, the selected recipients will also receive structured training on entrepreneurship and financial management by SME Corp, and support to develop a viable business venture of their choice.
BIMB will be providing further details on the programme, in particular the mechanics and features as well as the application process in due course. After the pilot, the Bank plans to roll-out the iTEKAD programme to more financial institutions and in more states.
3. Relief measures for affected policyholders and takaful participants
(1) Deferment of payment of life insurance premiums and family takaful contributions
Life insurers and family takaful operators will allow affected policyholders and takaful participants an option to defer the regular premium/contribution payments due under life insurance policies and family takaful certificates for three months without affecting the policy coverage. This option will be available from 1 April 2020 until 31 December 2020.
(2) Extension of flexibilities to reinstate or preserve life insurance and family takaful protection
Additionally, life insurers and family takaful operators will also provide the following assistance to the affected policyholders and takaful participants until 31 December 2020:
• Extend the period during which a policyholder and takaful participant can reinstate a policy/ certificate that has lapsed.
• Provide options to enable policyholders and takaful participants to continue to meet their premium/contribution payments and
maintain their policies/certificates.
• Waive fees and charges imposed for changes made to policies/certificates.
• Waive any penalties/consequences for late payments of premiums/contributions, particularly where policyholders/takaful
participants are unable to access electronic payment channels during the Movement Control Order.
(3) Flexibility to meet general insurance premiums and general takaful contributions
General insurers and general takaful operators will facilitate requests for flexibilities by affected policyholders and takaful participants to meet their premiums/contributions due during this period to ensure continued risk protection for their properties and businesses.
(4) Expedited claims processing
All insurers and takaful operators will expedite and facilitate claims processes related to COVID-19. Priority will be given to the issuance of guarantee letters, waivers of applicable waiting periods and processing of claims payments.
(5) Additional Regulatory and Supervisory Measures
The Bank will be reducing the interest rate(IRCC) and profit rate(PRCC) stress factor caps applied under the Risk-Based Capital Framework for Insurers and Risk-Based Capital Framework for Takaful Operators(Frameworks), respectively. The IRCC and PRCC caps will be reduced from 40% to 30% with effect from 31 March 2020, to better reflect the changes in the prevailing market conditions since the stress factors were first set in 2009.