Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment, and a verifiable credit history. It is designed to enable them to start a small business (microenterprise).
Well, this seems to be the perfect timing to introduce this because more Malaysians are moving from working for someone to starting their own small business. Nonetheless, many of them find the biggest obstacle preventing them from moving forward with their business idea is the lack of financing. With microcredit, people now have a better chance of realising their dream and calling themselves entrepreneurs. So where are we to look for these microloans in Malaysia?
Here Are The Leading Microcredit Providers In Malaysia
1. Agrobank
Modal Usahawan 1 Malaysia-i (MUS1M-i) (Islamic Concept) is designed to help those who are interested to start a business in agro-based industries and related services, manufacturing activities and cottage enterprises. Loan size ranges between RM 1,000 to RM 50,000 and interest rate can be as low as 7.92%. You can choose to repay the loan from a tenure period of 3 months to 5 years.
Requirements:
- Microenterprises
- Individuals
- Age between 21 – 60 years old on the date of application
- At least with 2 years business/project experience • Have valid business license/permit / registration
- Place of residence close to business/project site
2. Bank Rakyat
This bank offers Skim Pembiayaan Mikro-i (MUsK) (Modal Usahawan Kecil), Skim Pembiayaan Mikro-i (MUsK) MEF (Micro Enterprise Fund), Skim Pembiayaan Mikro-i (MUsK) Individual and Skim Pembiayaan Mikro-i (MusK) Tanpa Panel.
These financing schemes offered are aimed to help the entrepreneur in agriculture, services, retailing & trade and manufacturing sector. With a loan size between RM 1,000 to RM 50,000, you can choose the repayment tenure period from 1 month to 5 years. The interest rate charged ranges between 8.25% - 14.55% flat rate, based on the loan size and tenure period.
Requirements:
- Members of cooperatives and Hawkers and Petty Traders Association
- Self-employed individual
- Full-time Microenterprises
- Age between 18 - 65 years old
- Belongs to a self-help group (SHG)
- At least with 2 years business experience
- Place of residence is in the business vicinity
- Have valid business license / permit / registration
3. Bank Simpanan Nasional (BSN)
BSN Micro / BSN Micro-I is the microcredit product of BSN and loan size can go from RM 5,000 up to RM 50,000. Those who are planning to start their own business in manufacturing, retail, wholesale, and services industry can consider to take up this loan with the interest rates charged between 6.38% to 11.26% (flat).
Requirements:
- Self-employed individuals
- Microenterprises
- Age between 21 - 60 years old
- Have valid business license / permit / registration
- Have been in business continuously for at least 2 years
- Applicant operates the business on fulltime basis
See also: How Much Can You Earn By Selling Ramly Burgers?
4. Alliance Bank
Regardless of sector, if you are planning to start your business, you can consider to take up a microcredit from Alliance Bank from RM 5,000 to RM 50,000. You can choose tenure period from 12 to 84 months and the interest rate is between 9.68% to 13.68% (flat).
The TWO microcredit products offered by Alliance Bank are Cash Vantage Personal Financing-i (Islamic) and Cash First Personal Loan (Conventional).
Requirements:
- Self-employed individuals
- minimum 2 years in business
- Has valid business registration
- Age between 21 – 60
5. AmBank
AmBank’s microcredit product, AmMikro Plus (Conventional) allows borrowers to take up a loan from RM 5,000 to RM 50,000 and has two plans for you to choose from. Tenure period is available from 1 year to 5 years.
Plan A (Loan Amount: RM 5,000 to RM 20,000)
Bank Negara Funded Loan: 24% per annum (2% per month)
Internal Fund: 30% per annum (2.5% per month)
Plan B (Loan Amount: RM 20,001 to RM 50,000)
Bank Negara Funded Loan: Base rate + 4.36%
Internal Fund: Base rate + 4.61%
Requirements:
- Individuals / sole proprietors / partnerships / private limited companies
- Aged between 18 – 60 years old (age limit at maturity date)
- At least with 3 years of business experience
- Has valid business registration
6. CIMB
CIMB offers a flexible microcredit option to all Malaysians who are planning to start a business in any sector and you can borrow up to RM50,000. Minimum loan size is RM 3,000. Xpress Cash Financing-i (Islamic) has a tenure period from 6 months to 5 years for you to choose based on your financial capability with an interest rate of 21% per annum.
Requirements:
- Salaried workers
- Self-employed individuals (Micro enterprises)
- Age between 21 – 60 years old
- Minimum of RM800 monthly gross income
- 6 months working / 6 months in business
7. Maybank
Either it’s Maybank Microfinance (Conventional & Islamic) or SME Micro Financing (Conventional), you can consider any of these microcredit products to finance your dream business regardless of the industry you are in.
Maybank Microfinance (Conventional & Islamic)
Loan Size: RM 1,000 to RM 10,000
Tenure Period: 1 – 2 years
Interest Rate: 24% per annum
Requirements:
- Malaysian citizen
- Age between 21 – 60 years
- Valid business license / permit/ business registration
- Micro-enterprises
- Group-5 members per group
- Household income below RM24,000 p.a
- Min 1 year in operation
SME Micro Financing (Conventional)
Loan Size: RM 20,000 to RM 50,000
Tenure Period: 3 – 5 years
Interest Rate: 10% - 12% per annum
Requirements:
- Companies registered with Companies Commission of Malaysia
- Min 3 years in operation
- At least 3 years banking relationship (borrowing & non-borrowing) with any financial institutions
8. Doctor Ringgit
You can borrow from as low as RM200 up to RM20,000 and choose tenure period up 12 months, based on your preference with Doctor Ringgit. If you are looking for an easy and fast loan application, this is the right place for you to apply.
Being one of the licensed money lenders in the market, you will not have to worry about the interest charges as it is fixed at 1.5% per month (18% per annum), which is more competitive compared with the market rate.
You only need to provide a copy of your MyKad and this product is only applicable for those who stay in Klang.
Did you know you can apply for a personal loan to fund your business too? Compare the best personal loans in the market here and you might just find the right one!
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