Published: on 23 April 2012
HAVE you pencilled in your dates on the calendar? "Jom Niaga" will kick start tomorrow at SMK Dato' Perdana, Bachok, Kelantan! Yes, the "sugar parade" is on and this is the one event that you should not miss!!
We, the SME Corpians, are equally excited organising Jom Niaga for you as we meticulously line up each programme with care, ensuring that the "entrepreneurship spirit" is well entrenched in each of those programmes.
The Jom Niaga Carnival caters for all sizes of companies - big, small and not forgetting the micro too - including individuals from all walks of life. What would be interesting to look out for in Bachok is the launch of the first-ever RM2 billion "syariah-compliant fund for SMEs"! The birth of this fund couldn't have been at a better cradle than the state of Kelantan as it has aptly been referred to as the "Mecca of Malaysia"!
As we speak about syariah compliance, I am being reminded that there are many verses in the Quran and traditions of the Prophet Muhammad (Peace be upon him) which clearly demonstrate the Islamic tenets in business transactions.
For Muslims, the dictates of the Quran and the teachings of the Prophet (PBUH) set a scale in everybody's mind to distinguish between the lawful and the unlawful means of earnings and to prohibit or disapprove of all things that are either morally wrong or socially unacceptable.
Foremost among the unacceptable business practices strongly condemned in Islam is riba.
Riba (interest), by definition, is the extra sum the money lender charges the borrower for deferred payment. Islam forbids all forms of riba since it involves both oppression and exploitation. Riba is forbidden in Islamic economic jurisprudence fiqh and is a major sin.
The Quran says: "Allah has permitted trading and forbidden riba (usury)." - the Al Baqarah Verse (2:275).
Sunnah(2) is equally emphatic in denouncing riba. The Prophet (PBUH) is reported to have said: "May Allah send down his curse on the one who devours riba and the one who pays it and on the two witnesses and on the person writing it." - Hadith Ahmad, No: 624.
In our keenness to earn legitimate (halal) earnings, it is important for us to observe the universal codes of lawful and unlawful business transactions. In fact, Islam (and I am sure all other religions too) encourages truthfulness in business transactions and raises the status of a truthful merchant, so that he will be at par with the holy warriors and martyrs, in the hereafter.
The Prophet (PBUH) is reported to have said: "The truthful merchant (is rewarded by being ranked) on the Day of Resurrection with prophets, veracious souls, martyrs and pious people." - Hadith Tirmidhi, No: 1130.
The Prophet (PBUH) has also exhorted the believers to strictly adhere to truthfulness in business transactions. He says: "The seller and the buyer have the right to keep or return the goods as long as they have not parted or till they part; and if both the parties spoke the truth and described the defects and qualities (of the goods), then they would be blessed in their transaction, and if they told lies or hid something, then the blessings of their transaction would be lost."
So, having put in context about ethics in business as well as borrowing and lending, what's in store about this syariah-compliant fund for SMEs that will be launched in Bachok?
To generate the pool of funds and so as not to be too dependent on the government, SME Corp worked together with the Ministry of Finance and the Association of Islamic Banks of Malaysia to deliberate on the "modus operandi" of the most effective way to create better access to financing for SMEs.
After a series of meetings, 13 Islamic banks agreed to participate in this scheme by providing syariah-compliant financing of up to RM2 billion. These financial institutions include Bank Islam, CIMB Islamic, Affin Islamic, Bank Rakyat, Maybank Islamic, Hong Leong Islamic, Alliance Islamic Bank, HSBC Amanah, Public Islamic Bank, AmIslamic, RHB Islamic, Kuwait Finance House and Bank Muamalat.
So, how do we facilitate easier access to financing for SMEs? The government, through SME Corp, will take up the two per cent profit rebate of your financing. In fact, SMEs (including micro-enterprises) who already have an existing syariah-compliant financing approved in 2012 are also eligible to get the two per cent profit rebate that will be borne by the government. Watch out... this profit rebate has an expiry date which will end in December 2016 and it is only for financing facilities approved in 2012 and 2013.
How much can SMEs borrow? Up to RM5 million, aggregated based on common directors/shareholders and all financing under this scheme from all participating Islamic banks. No minimum amount. As l said, even the micro-enterprises are eligible to apply.
What sort of the financing facility is eligible? All ringgit-denominated syariah-compliant financing for all purposes, including but not limited to working capital, asset acquisition and upgrading of businesses.
However, it excludes non-funded facilities (e.g. bank guarantee and letter of credit) and acquisition of other business and companies. It also excludes refinancing or restructuring of existing facilities.
Accounts that have been restructured before turning non-performing in 2012-2013 are eligible under the scheme.
However, you need to ensure that at the point of application, your company fulfills either one of the followings:
* SCORE at least two stars;
* MCORE at least Level 1;
* Certified 1InnoCERT;
* Certified under National Mark of Malaysian Brand;
* Accorded MSC status by MDeC;
* Accorded BioNexus status by Malaysian Biotech Corp;
* Certified under Green Tech Cert under Malaysian Green Technology Corp; or
* TeraS selected SMEs under TERAJU.
So, does your company fulfill any one of the criteria? Are you intending to expand your business? If the the answer is "YES", then it's time to step ahead and be bold to succeed. Just like Emily Dickinson once said, "Fortune Befriends the Bold"! If you want to meet those bankers that provide the fund, they are equally eager to see you in person at Jom Niaga @Bachok! See you there!
Datuk Hafsah Hashim is the chief executive officer of Small and Medium Enterprises Corporation Malaysia (SME Corp Malaysia)
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