What is the Government Guarantee Scheme MADANI (GGSM)?
The Government Guarantee Scheme MADANI (GGSM) is a crucial initiative by the Malaysian government aimed at providing financial support to Small and Medium Enterprises (SMEs) and Medium-Sized Companies (MSCs). The scheme is designed to empower businesses across various economic sectors by offering government-backed guarantees to financial institutions. With the assistance of Grand Capital Advisory PLT, businesses can easily navigate the application process and secure the financing they need to grow, innovate, and contribute to the economy.
Objectives of the GGSM
The primary objective of the GGSM is to facilitate financing assistance for Malaysian SMEs and MSCs, particularly in key sectors such as High Technology, Agriculture, Manufacturing, and Tourism. By providing government guarantees, the scheme reduces the risk for financial institutions, making them more willing to extend loans to businesses in these critical areas. Grand Capital Advisory PLT can help your business take full advantage of this opportunity, guiding you through each step to ensure your application is successful.
Warranty Period and Qualifications
The GGSM offers a warranty period of up to 10 years or until December 31, 2035, whichever comes first. This long-term support is available to a wide range of business entities, including sole proprietorships, partnerships, and limited liability partnerships that are majority-owned and controlled by Malaysians. Grand Capital Advisory PLT assists eligible companies in applying for the GGSM, ensuring that your business meets the necessary criteria and has the best chance of approval.
Exclusions and Application Period
However, the GGSM has certain exclusions. It is not available to entities listed on the Main Board, Government-Linked Companies (GLCs), Ministerial Finance Incorporated Companies (MKDs), State Government-owned enterprises, or subsidiaries where at least 51% of shares are held by such entities. Additionally, civil servants in service are excluded unless they obtain prior written approval from their employer. To make the most of the application period, which is open until December 31, 2024, Grand Capital Advisory PLT can help your business apply promptly and correctly.
Funding Purpose and Types
The GGSM is designed to support businesses in their working capital needs and capital expenditure for new financing projects. It is important to note that this scheme cannot be used for refinancing existing loans. The types of financing available under the GGSM include Loan/Term Financing, Overdraft Facility/Business Cash Flow-i, Revolving Credit/Revolving Facility-i, and Trade Financing/Trade Financing-i. Grand Capital Advisory PLT can help you determine which type of financing is best suited to your business’s needs and guide you through the application process.
Funding Limit and Guaranteed Protection
The funding limit under the GGSM is up to RM30.0 million per company for the four main sectors—High Technology, Agriculture, Manufacturing, and Tourism—and up to RM20.0 million per company for all other sectors. The scheme also includes an aggregate group limit, ensuring that businesses do not exceed RM50 million across all guarantee schemes managed by SJPP, including the GGSM. Grand Capital Advisory PLT can assist in securing up to 90% guarantee protection on financing for the main sectors, ensuring that your business can access the maximum benefits of the scheme.
Interest Rates and Profit
Interest rates under the GGSM are competitive, not exceeding the Basic Lending Rate (BLR) or Basic Financing Rate (BFR) of the financial institution plus 2%. This makes the GGSM an attractive option for businesses looking to secure financing at reasonable costs while benefiting from government-backed guarantees. Grand Capital Advisory PLT can help your business obtain these competitive rates and ensure that you fully understand the terms and conditions of the financing.
The Government Guarantee Scheme MADANI (GGSM) represents a significant opportunity for Malaysian SMEs and MSCs to secure the funding they need to thrive in today’s economy. By offering flexible financing options with government-backed guarantees, the GGSM helps reduce the barriers to accessing capital, enabling businesses to invest in growth, innovation, and long-term success. Grand Capital Advisory PLT is here to help you every step of the way, ensuring that your business can successfully apply for and benefit from this vital scheme.
