Malaysia Tuesday announced to launch a 200 million ringgit (57.14 million U.S. dollars) to increase micro financing for micro enterprises.
Given that a significant percentage of small and medium enterprises (SMEs) in Malaysia were micro enterprises, adequate access to financing for this sector was vital to enable them to contribute to the country's economic development, Malaysia's central bank said in a statement released here.
Bank Negara Malaysia said that it will channel the funds to micro enterprises through the existing mechanism Micro Scheme, which allows micro enterprises to obtain micro financing up to 50,000 (some 14,200 U.S. dollars) ringgit for working capital.
The scheme has successfully benefited more than 40,000 micro enterprises since it was introduced in 2006, the bank said.
Micro financing under this scheme requires no collateral, minimal documentation and provides for quick approval and disbursement.
Currently, nine financial institutions participating in this micro financing scheme in the country are allowed to determine the interest or profit rate to be charged, according to the bank.
Source:Xinhua
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