NPL Rate Under Control, Govt Confident Credit Guarantees Will Drive SMEs, Investments -- Amir Hamzah

PUTRAJAYA, Jan 15 (Bernama) -- The non-performing loan (NPL) rate for the guarantee scheme under Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) remains low at around two per cent in line with the growth of small and medium enterprises (SMEs).

It also reflects the manageable level of risk despite the significant increase in financing guarantee allocations under Budget 2026.

Finance Minister II Datuk Seri Amir Hamzah Azizan said the expansion of the credit guarantee scheme was implemented cautiously through close collaboration with financial institutions to ensure that fiscal risks remain under control and long-term financial discipline is maintained.

“Loan screening is carried out by financial institutions and scheme implementers, and so far the non-performing loan (NPL) rate has remained low, around two per cent, which is at a manageable level,” he told the media at the launching ceremony of the Budget 2026 initiative – Provisions for the Business Financing Guarantee Scheme and the Housing Credit Guarantee Scheme here today.

Under Budget 2026, the government has allocated financing guarantees through the Business Financing Guarantee Scheme with a higher total amount of RM30 billion, in line with the goal of driving the growth of small and medium enterprises (SMEs) and the MADANI Economy.

Of this amount, RM10 billion is allocated specifically for bumiputeras, and the government expects a significant surge in engagement as a result of the allocation.

Amir Hamzah said that to support the development of the country's halal industry, the financing guarantee for halal SMEs has also been increased to RM2 billion to expand access to capital for entrepreneurs in the sector.

In addition, export-oriented mid-tier companies have been allocated guarantees of RM5 billion, while businesses in the high-value industrial sector have also received financing guarantees of RM5 billion.

He said although the guarantee allocation has been increased, the loan screening process still needs to be implemented properly, in addition to continued support for SMEs, so that they understand the financing structure and the requirements of good financial management.

On the decline in the uptake of SME-related schemes last year, Amir Hamzah said the situation was influenced by the challenging global economic environment and more cautious investor confidence levels, in addition to the government's decision not to include mid-tier companies in the SJPP at that time.

“This year, mid-tier companies were re-introduced following a larger allocation,” he said.

Earlier in his speech, Amir Hamzah said that to help those with irregular incomes, the MADANI Government, through Budget 2026, has continued the Housing Credit Guarantee Scheme (SJKP) with financing guarantees of up to RM20 billion for first-time home buyers with a target of helping more than 80,000 people through guarantees of up to 120 per cent.

“SJKP will also extend protection to contract staff and offer the MADANI Housing Credit Guarantee Scheme to help those without a fixed income own homes through selected financial institutions.

“Since the establishment of Syarikat Jaminan Kredit Perumahan Bhd at the end of 2007 until December 2025, it has approved guarantees for more than 104,000 applications with a total financing of RM25 billion.

“For the year 2025 alone, the allocation of the scheme under the SJKP had benefitted more than 27,000 applications with a total approved financing of RM7 billion. Meanwhile, for 2023 to 2025, a total of 88,000 first home buyers had achieved their dreams with a total financing of RM22.8 billion,” he said.

He said Malaysia's Gross Domestic Product (GDP) growth remains stable with a target of 4.0 to 4.5 per cent for 2026, taking into account the impact of global tariffs.

“The IMF has also revised its economic forecast to be more positive, reflecting the better-than-expected resilience of the global economy. This stability provides confidence and predictability to investors to continue investing in Malaysia,” he said.

-- BERNAMA