Malaysia Young Entrepreneur Fund: Malaysia SME Should Know About

Malaysia Young Entrepreneur Fund: Malaysia SME Should Know About


How Can Young Entrepreneurs Malaysia Make Use of The Malaysia Young Entrepreneur Fund

Among the many loan incentives for the SMEs in Malaysia, is the Young Entrepreneur Fund. It has been helping create and develop youth entrepreneurial minds in the country. The program is one of the most reasonable incentives for the smaller startups and businesses. Besides, the Malaysian government has considered highly about the program, expected to not only help young minds but also to contribute to the flourishing economy of the country. Safe to say, this program has delivered, with many businesses receiving millions of funds for growth and being a youth SME owner or entrepreneur in Malaysia. This is a loan program you should probably know about and here, let’s see in depth about it.

Young Entrepreneur Fund (YEF): What Is It?

The young entrepreneur’s fund is a loan scheme in Malaysia, providing entrepreneurs aged between 18 to 30 years old a loan funding from RM 50,000 to RM 100,000 for their businesses. Also, the scope of the loan is for the working capital and the purchase of business resources, and the financing rate depends on the type of the jobs the fund is used. This incentive has based on Syariah financing concept, with its five principles being joint responsibility financing, no collateral, no additional fees, an underlying reason for the loan and the bank not being allowed to make a profit from the loan itself. The tenure is a maximum of 7 years including a maximum one year grace period with a net profit rate of 5% per annum.

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Margin Of Financing

Working Capital

Up to 100% financing for jobs such as purchasing raw materials, stocks, advertising and promotion, e.t.c. Allow for reimbursements if the expenses are not more than three months old during the time of approval.

Purchase Of Business Resources and Assets

  • For brand new machinery and equipment: Up to 95% financing and refinancing is not allowable.
  • Used Items: Up To 70% financing. Allow for reimbursements if the expenses are not more than three months old during the time of approval.

Malaysia Young Entrepreneur Fund: Malaysia SME Should Know AboutEligibility

To be eligible for the Young Entrepreneur Fund(YEF), one must fulfil the following conditions.

  • Should be a Malaysian Youth, 18 to 30 years of age.
  • The business should be incorporated in Malaysia with Suruhanjaya Syarikat Malaysia (SSM). The company type could be a sole proprietorship, partnership or Sdn Bhd.
  • In case the registered company is a partnership, the youth applicant must have more than 51% of the shares and be the decision maker of the company.
  • The person should have an entrepreneurship/vocational certificate. In the absence of the certificate, the person will have to take an entrepreneurship training from Centre for Entrepreneur Development and Research (CEDAR), SME Bank.
  • The company/firm should be in operation for less than a year.

Security and Collateral

For Company:

  • Joint & Several Guarantee
  • Facility Agreement
  • Minimum 10% Cash Collateral (ratio of 1:10).

For Firms:

  • Facility Agreement

Application Procedure

To apply for the Young Entrepreneurs Fund (YEF), make sure you have all the documents needed to verify that you comply with the terms of requirements. This includes your business profile, company portfolio, NRIC certificate, e.t.c. After this, you could make an application to the nearest SME bank outlet or could approach them in their website. Also, they might asked you for extra documents for additional verification. Besides, You will get the required funds after they approve your application.

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Well, this was it for the information you would need to know about the Young Entrepreneurs Fund. As for information about starting a business, you may read more here on the guide to company registration and SMEs in Malaysia.