Tabung Usahawan Siswazah @ Graduate Entrepreneurs Scheme

I’ve attented a course months back organized by INSKEN (Institut Keusahawanan Negara) under the Skim Usahawan Siswazah to be eligible to ask for loan under tabung usahawan siswazah or called graduate entrepreneurs scheme.

So what is Tabung Usahawan Siswazah?

It’s a loan for graduates venturing into entrepreneurship be it startups or company expansion.

Who administer the fund?

It’s being administered by SME Bank. If you would like to know more about this fund, call them up at 1-300-88-3131 or visit their website: SME Bank.

What is the eligibility of applying for Tabung Usahawan Siswazah?

• Have finished the Skim Usahawan Siswazah seminar or Kursus Asas Keusahawanan Siswa or other approved seminars equivalent.

How do I apply for the seminar to be eligible for TUS?

• Previously I just applied online under the Ministry’s website. But since the ministry is disbanded, try and keep yourself updated through INSKEN website at : http://www.insken.gov.my or call them at : +603-8880 5711

What is the loan amount and interest rate?

The loan amount is from RM20,000 to RM250,000 and the interest rate of 4% (without BLR ok!)

Do I need a collateral or guarantor?

For below RM50,000 it works like micro loan where you need a guarantor with a specified income while for RM50,001 above, you need to have at a percentage of collateral and guarantor.

What are the allowable expenses for the fund?

• Fixed assets and working capital
• Maximum payback period of up to 10 years with grace period of 2 years (grace period depends upon their discretion)

What are the indsutry allowed for the funds?

All industries as long as it’s profitable and approved by the panel during your business presentation.

What is the application process? (based on my experience with my friend)

• Send your business plan for review to INSKEN
• INSKEN submit your plan to SME Bank
• SME Bank call you up for an interview
• Results would be notified after interview

Note: During the seminar I was notified that application process is around 2 months. They have a tight ISO therefore they should complete your application on time.

Please take note that I was notified by SME Bank that all applications for the fund is on hold but the funds are there for us, graduates. It’s being put on hold because the Ministry of Entrepreneur and Co-operative Development is no more and they are now under the directions of MITI (Ministry of International Trade and Industry). I hope Tok Pa and Dato’ Mukhriz speed up the process as lots of us graduates are anxious to apply for the fund:)

Tips: My friend is a wedding planner (sole proprietorship) and she applied for the fund. Given her experience in doing business and a good business plan, she managed to secure the funds and had a good interview. T0 increase your odds of getting the fund:

1. Start your business in micro terms: kecil-kecilan. Ask for micro loan 1st to get experience on your business first.
2. Gain working experience in the industry. Say you wanna open up an IT business, work with a company which is similar to your business idea and apply from there.
3. Get a strong and experienced management team. Recruit experienced people into your team to do the business. This would lower the risk of the bank and hence easier for you to secure funding.
4. Do your homework. Don’t ask silly questions, always research throughly about the fund before applying.

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MSC Technopreneur Pre-Seed Funding (Grant)

Multimedia Super Corridor Technopreneur Pre Seed funding is specialy tailored for technopreneurs at the pre seed level stage. Pre-seed means you have an idea but you do not have a product as of yet. Therefore this grant is given to you to change your idea into a product.

Please do not get confused with business loan which is focused directly on business expenditure, this grant is for you to create your product (product focused expenditure).

Again, this is a conditional grant, therefore you must make sure you complete the deliverables you agree (example: build software until the functional stage, etc). If you violate the deliverables or don’t complete the project as agreed you can be liable to pay. Please take note that if you receive investment, loan or grant worth RM1 million and above, you have to pay back your grant. If you don’t get such investment or grant, no need pay.

Who is eligible for this funding?

• Malaysians and applicants must be individuals of at least 2 person (aged 21 years old and above)
• One project member must work full time
• For university students and employees, you need to get your head of department to sign letter of consent

Your business idea must be within this qualifying category to get the funding:

• Creative multimedia and content development
• Software development
• Internet based businesses
• Support services
• Shared services outsourcing
• Hardware design

Funding amount?

RM150,000 maximum with a 12 months duration of completion.

What is the qualifying expenditure?

• Consultancy, Research & Development Services-Outsource (20%)
• Development Materials-Components and devices
• Company Incorporation-(RM2.5k)
• MSC Malaysia status application-(RM2k)
• Market Feasibility Testing-Travel & Accommodation (10%)
• Laptops/desktops/printers/software (10%)
• Allowance-Max RM1.5k per member (RM90k & Max 5 members)

How do I apply?

Please take note that the pre seed funding application is open in batches. Refer to the website for the opening dates to apply.

How do I contact them?

MSC Malaysia Technology Commercialization Centre
c/o Secretariat, Technopreneur Pre-Seed Fund Programme
Technopreneur Development Division
Multimedia University (MMU)
63000 Cyberjaya
Selangor Darul Ehsan

You can call them at +603-8313 8000 or e-mail:   techpreseed@mdec.com.my

You can visit the site at Technopreneur Pre Seed Funding – Technepreneur development website or download the documents below:

• Application Form and Guide
• FAQ

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Failure of Obtaining Business Loan from Bank for Graduate Entrepreneurs

I’ve read lots of posts in forum where Malaysians would complain that obtaining loan is not as easy as promoted by banks for graduates. Although the Malaysian government have prepared banking facilities such as “Tabung Usahawan Siswazah”, pembiayaan mikro or anything else, there are still problems in getting the funds to start the business.

What is the problem really?

Before I start putting down into words, please take this analogy:

Mr. X approach you to request for funds (pinjaman) for his business. Mr. X talks about his idea to you but he has no business documents prepared. You request for the information on the business he is doing but it seems that Mr. X does not understand the nature of his business in economic form, etc. Sensing a problem with his idea, you replied no to Mr. X request.

Now change “Mr. X” as yourself and you as the “bank”. Would you lend him some money to start his business except out of curteosy? Remember banks are not charity institutions.

What are the factors that would make you fail to get the loan?

• Not understanding the business loan application process. You need to know the documents required, the guidelines and standards on paper presentation by the bank, disclosures, etc.
  (I have an experience of such an embarrassment when I to the bank and request to open up a partnership account. We forgot our company stamp, we don’t even did our homework on what documents to prepare for the application. The bank officer laughed and it was not funny but it did teach me a lesson. Do this for bank loan application, you create a very bad impression.)
• Incomplete business plan (Rancangan Perniagaan tidak lengkap @ buat cincai). Business plan is the most important aspect where the officer would look through and decide on first sight whether your business is viable or not. You must make sure that every detail is based on facts, for example your potential market size must be based on the demographics obtained from the Majlis Perbandaran. If you take it easy, you assume, then they’ll make an assumption of your loan too.
  (Another experience of mine: We did not prepare our business idea well for the pre-seed funding application under MSC Technopreneur Funding. Although it looks nice but during the interview the panel asked us about our biasness of just listing 2 competitors. Indirectly, he means we are not doing our homework. So our application got turned down)
• Your loan payback attitude. Make sure you are the type who is eager to pay back your loan. Usually before getting this kind of loan you would have to answer a series of tests. This test would determine whether you wanna pay back or not. If you are the type who is “liat nak bayar”, change your attitude.
• Your business in the economic situation. A bank would be likely to have funded a similar business like yours, therefore they understand the economy better. You must convince them through your reasearch and papers that your business is better and would guarantee you can pay back their loan. Some people drop dead when the officer asks: “bisnes ni tak boleh dik, ekonomi tak bagus, bank tak nak.” If you give up on this first sight, then you must consider what is the meaning of “entrepreneur”
• Collateral and guarantor (penjamin & cagaran). Remember this: the more the amount you ask for loan, the more collateral and guarantor needed. You must secure guarantor and collateral in any way if you want the loan. This has and always will be the problem of getting loan. Be smart, if you can’t get loan, go for pre seed funding first or a different industry.
• Inexperienced management team. Let’s face it, no experience, no loan. But remember, as an entrepreneur, you can afford to search for people who are experienced and offer them a job in your startup. What you need to do is to secure their funding once they agree to join you with the salary you offer him/her.
• Being an idiot. Simply asking stupid questions where the answers are clearly on the papers or not doing your research before presenting something is darn stupid. Avoid being labelled as one, because being a graduate, experienced people would have a perception that you are not knowledgable therefore you need to capture them by talking in their own business language and being knowledgable.

Hopefully that helps, based on my own experience and some of my friend’s experience while helping her getting a loan successfully for the Tabung Usahawan Siswazah.

All da best!

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PUNB Prosper Scheme : Siswazah

I love this post the most! I am a graduate as well therefore opportunities given to graduates to start up their own business are lots! I’ll post on Graduate Entrepreneurs Fund by SME Bank in the next few days.

What is SKIM Prosper Siswazah?

It’s for graduates who aspires to be trained as an entrepreneur and to startup their own business. Focus is mainly on retailing (peruncitan) but I was informed during Skim Usahawan Siswazah that it is open to any type of business approved at the discretion of PUNB.

What is punb?

Permodalan Usahawan Nasional Berhad. You can go to their website at : http://www.punb.com.my

Who is eligible?

For individuals:

• Bumiputera graduates with at least a diploma
• Aged not more than 33
• Cost of investment is RM500

For companies:

• 100% bumiputera owned
• New startups or company expansion

What is the interest rate?

It is charged at 3% (during the time i was informed). Without BLR. That means 3% flat with a negotiated grace period. Grace period is the time where you don’t have to pay the loan. For example, you have to pay back in 5 years, the 1st year no need pay and the rest must pay.

What is the financing method:

Package A

• Loan amount of Rm5,000 – RM50,000 for sole proprietorship & sdn bhd (1 person or company)
• Payback period is 3-7 years

Package B

• Loan amount of RM50,001 – RM100,000 for partnership & sdn bhd (2 person or company)
• Payback period is 5-7 years

For both packages you get advisory services which includes, per operation, accounts management and training during the financing period.

What is the process?

It’s just like SKIM Prosper Peruncitan I posted earlier:

• Register and pass the competency test,
• Go for Kursus Rancangan Perniagaan Prosper Siswazah for 3 days,
• Present your RP, Rancangan Perniagaan or Business Plan as you call it
• Approval
• Go for Kursus Asas Keusahawanan Siswazah for 4 days

If you are interested, You can get the form by registering online at PUNB E-Borang or contact the secretariat at:

Sekretariat PROSPER
PERBADANAN USAHAWAN NASIONAL BERHAD
Tingkat 10, Blok 1B
Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur

Alternatively, you can email prosper_siswazah@punb.com.my or call +603 2785 1515

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List of Micro Loans / Microfinance / Pembiayaan Mikro in Malaysia

Whatever the terms maybe in Malaysia, micro loan has one sole purpose which is to provide financing for those that do not possess collateral or guarantor. My first encounter and research on micro loan was during my Islamic finance class. I came to know about Grameen Bank and its activities which provided such services and its contribution so significant, the founder Muhammad Yunus received the Nobel Prize!

So what is micro loan for?

I’ve posted a post related to micro loan but here I will be more specific. Micro loan has the following features:

• Short disbursement time than other loan application
• Loan amount is usually less than RM50,000
• No guarantor needed or guarantor with minimum income of RM1,000 below (penjamin)
• No collateral needed (tiada cagaran ke atas aset persendirian, tanah ke ape, etc)

If you need information on previous posts about micro loan, you can click the links below:

• Skim Tabung Ekonomi Belia

So what are the available micro loan from Malaysian private banks? You can click the link below to go to their site for more clarification but the above characteristics still apply.
(P/S: for complete comparison table and contact number, you can download here from SMEINFO: Comparative Table on Pembiayaan Mikro)

• Modal Usahawan Tani – Agrobank (For expansion of agriculture projects)
• AmMikro – AmBank (For entrepreneurs)
• CIMB Express Cash Financing-i (for self employed and entrepreneurs)

What you need to keep in mind when applying for micro loans?

• Micro loans are not for the purchase of fixed assets! Usually it’s in the form of working capital or capital expenditure. Don’t expect to buy machinery with this loan.
• Be ready with your previous audited financial statement or your bank statement accounts (3 months)
• Be sure to check the micro loan is for business expansion or startup. If startup, try Skim Tabung Ekonomi Belia as above.
• Of course, you have to be Malaysian and usually 21 years old above.

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Prevent Others from Stealing Your Business Idea

Ever had that spark in mind when you have that great big buisness idea? And feel like telling someone be it your potential business partner or a company to provide you with seed funding?

Instead of presenting your idea to them, your enthusiasm stops. Suddenly fear kicks in, the fear of someone stealing your idea when you have everything in mind! (or in paper)

Well before securing your business idea you need to be clear of this aspects:

• How good is your business idea? If you have an idea in mind but haven’t put everything on paper in terms of situational analysis, strategic analysis, ROI, marketing strategies, potential customers, competitive profile matrix, etc, then consider your idea redundant.
• Who are your management team? If you have an idea but your idea on your own business is limited, it’s better to have someone who is proficient in the industry as your team member. It wouldn’t sound right to the venture capitalist when you are a graduate with no working experience and your idea is about oil and gas industry where you know nothing about the license, business nature, etc.
• Is your idea sell-able? Can your idea be a hit? Do some homework and draft working theories based on previous products which is a success and share similarity with your idea.
• What is the product-to-market time? If your product takes you 3 years to commercialize please do re-consider, certain venture capitals want shorter time period to reap the profits.

How do I protect my idea before presenting it?

• Ask the audience to sign a non-disclosure agreement / non-complete agreement. This agreement ensures that your audience does not use the information given by you for commercial purpose, whatsoever. Please be careful however to check on the audience before you ask them to sign; what I mean is venture capitals could be offended if you ask them to sign as they are professionals and not da kind of people who steals your idea.
• Patent your idea. This is useful for university researchers. During my research back in UPM, patent takes you years if you are in Malaysia, therefore having this is an advantage for R&D products.
• Appoint a lawyer. If you have that extra cash, go find some lawyers to consult you on the most effective way to protect your idea.

For examples on the protection I mentioned, you can check out these sites:

• Non-disclosure agreement sample
• Malaysia Copyright Act 1987
• Patents Act 1983 & Patents Regulations 1986

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Business Start-Up Fund (Agriculture, Manufacturing & Tourism): Northern Corridor / Korridor Utara

Status: This fund is not yet ready for application but I was informed that it will be approved in the very near future, so keep on checking the website.

Ever heard of NCER or Korridor Utara launched by our previous Prime Minister, Pak Lah? Well there are lots of financial and fiscal incentives but I’m gonna focus on the Business Start-Up Fund for this post.

What is this loan for?

It’s mainly for modern agriculture, manufacturing and tourism in the Northern Corridor (Perlis, Kedah, Perak, Pulau Pinang). Please take note that “modern” would be defined by NCIA (Northern Corridor Implementation Agency) therefore your business for example, agriculture, must meet the terms of modern. Since there is no list available, contact the person in charge when the fund is ready for application.

Are there any other details I need to know of this fund?

This is a soft loan fund, similar to the ones provided by MIDF (Malaysia Industrial Development Finance). I heard that there are no collateral or guarantor needed but probably you’ll need one when the amount you request gets higher.

What is the minimum and maximum amount for the fund?

Minimum RM250,000 to RM 3.5 mil maximum.

Who is eligible to apply for this fund?

• Company incorporated in Malaysia (70% Malaysians owned & at least 30% equity hold by Bumiputera)
• Business activity in NCER appointed region and in the NCER geographical location
• Promote NCER socio economy objective which are: job building, capacity building
• Company characteristics: operating less than 5 years old and not yet profitable or in commercial production
• Company must possess experienced management team (degree holders and above with prescribed years of work experience determined by NCIA)
• Business plan feasible and demonstrable market for the company
• Company must have at least 10% knowledge workers and at least 10% graduates.

Expenditure covered by the fund?

Mainly operating expenses and fixed assets. The expenses as per website are:

• 80% of land rental cost (2 yrs max)
• 80% of building cost (2 yrs max)
• Cost for land and building development
• Cost related to hiring knowledge workers
• Cost for accreditations and certification
• Cost of purchasing agricultural inputs
• Cost of acquiring machinery and equipment
• Cost of purchasing good quality animal and plant

How do I apply or this fund?

It’s not yet open for application but just like any other funds, it’s better to have a concept paper, prototype and a preliminary business plan ready and consult the officers. They would explain to you the criteria to obtain the loan better. Check the website from time to time as I heard they are going to accept application in the near time.

Should you need more information on the fund:

• Financial Incentives, NICA Website
• Head Office (+604 2383 888), KL Office (+603 2096 6888) & Kedah Office (+604 7329 881)

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Stages of Company Growth

Companies in Malaysia witness different growth levels from startup till the expansion period. However, the stages may differ according to different industries.

What is the importance of knowing about company growth? It’s simple really. You need different method of funding/financing & issues to be addressed from one period to another.

Here is a brief explaination about it:

• Idea – Prototype: Usually you only have a business idea at this point. It’s that spark where you think of something and you tell yourself that “if such a product can be made, it must be a hit, I can sell it”. During this period you need to draft up business plan (see my previous post on the importance of business plan) and transform your idea into a prototype with features similar to your idea.

  (Financing : Pre Seed Financing which means conditional grants or use your own money. You can click on my previous post on pre seed funding)

• Prototype – Product Production: Next you transform your prototype into a product for the market. This involves production and you need expert employees in your company and a good planning + execution.

  (Financing : Grants, Debt Financing or Equity Financing in which you get loan from bank or private institutions. It could be micro loan or any financial instruments. You can read more from my previous post on micro loan and SMIDEC Grant)

• Product – Market Expansion: Should you succeed in bringing your product to the market, the next thing is to expand it through product improvement or simply to export it overseas or expand it into new markets. It’s simply growing your business.

  (Financing: IPO Listing, this is where you get your company listed in the Bursa Saham or get institutional investors to invest big time on your company)

The main idea is to know which growth you are at and from there, strategize on picking which type of funding is most suitable. It’s very hard to get RM2 million funding from government agencies when you are at the prototype stage except if their fund is for prototype. So be sure to analyze and from there pick which funds are most suitable for you to startup your business.

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PUNB PROSPER Scheme: Retailing / Peruncitan

“Skim PROSPER Runcit” is administered by Permodalan Usahawan Nasional Berhad and is focused mainly on retailing or peruncitan. Please take note that this is a business loan similar to any other loans offered by any bank. I came across this scheme during a briefing by one of the PUNB officers during my “Skim Usahawan Siswazah” seminar organized by the-late Kementerian Pembangunan Usahawan (i’ll write the loan offered by SME Bank later + two other loans offered by PUNB)

The eligibility for Skim PROSPER Runcit are (individual):

• Bumiputera and aged 18 above
• Able to contribute at least 10% of the required loan amount

For companies:

• Involved in retailing / peruncitan
• Company wholly owned (100%) by bumiputera
• Companies with active growth with current loan less than RM1 million
• Company’s fixed asset is not pledged to any financial institution

There are 2 packages which are:

Package A (RM70,000 – RM200,000)

The loan is based on Qard-Al Hasan and with an interest rate of 3% (during Feb ’09 as informed by the officer). You have to pay just like any loan, monthly.You have to contribute 10% of the required loan amount and 90% will be given by PUNB. For example you need RM100,000, you will have to contribute RM10,000 and PUNB will contribute RM90,000.

You will also get services such as “pra operasi perniagaan, pemantauan akaun & khidmat nasihat perniagaan)

Package B (RM200,001 – RM1,000,000)

The loan is based on mixed instruments which are Musyarakah (equity financing), Bai Al Inah, Bai Bithanam Ajil or other instruments which means you can use the loan for fixed assets (bangunan, kedai, etc) purchasing. The interest rate is 3%. You can contribute in 2 ways which are: 10% from you, 10% PUNB equity, 80% loan by PUNB. Another way is 20% from you and 80% from PUNB.

You will also get services such as “pra operasi perniagaan, pemantauan akaun & khidmat nasihat perniagaan)

The eligible businesses allowed for this funding is as below:

• Kedai emas
• Pengusaha stesen minyak
• Bengkel baik pulih kenderaan
• Klinik pakar/ perubatan/ gigi/ haiwan
• Kedai tekstil & pakaian
• Kedai cermin mata/ optik
• Firma arkitek/ akauntan/ guaman dan lain-lain firma professional yang diiktiraf oleh kerajaan
• Kedai logam & bahan binaan
• Farmasi
• Penjualan makanan
• Kedai kasut/ barangan kulit
• Kedai kosmetik & kecantikan
• Kedai aksesori wanita
• Kedai peralatan komputer/ telekomunikasi & IT
• Kedai buku & alatulis
• Kedai herba dan ubatan tradisional
• Peralatan sukan dan rekreasi
• Kedai elektrik & elektronik
• Kedai runcit/ pasar mini
• Lain-lain perniagaan yang bersesuaian

The application process is fairly easy, first you need to go and “sesi kesesuaian keusahawan” in which it will determine your competency test in entrepreneurship. If you pass, you submit your business plan and the PROSPER secretariat will review it and after approval, you pitch it to the committee via a presentation. Finally, if everything goes well, the funds will be disbursed.

You can get the form by registering online at PUNB E-Borang or contact the secretariat at:

Sekretariat PROSPER
PERBADANAN USAHAWAN NASIONAL BERHAD
Tingkat 10, Blok 1B
Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur

Alternatively, you can email prosper_runcit@punb.com.my or call +603 2785 1515

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Pre-Seed Funding : Cradle Investment Programme

Pre seed funding! What is that? Basically it’s for people who have idea but have no product whatsoever nor any business plan in hand. This funding is for the pre seed stage where you will develop your product prototype and commercialize it. Therefore take note that this funding is primarily to : develop your idea into a prototype product.

Once you have a prototype, it would be much easier to get financing to grow your business. Think of it like this; you go to a bank and ask for loan, you have a working prototype, it would be easier to convince your panel to get the loan!

This is a conditional grant. That means you don’t have to pay back except if you do not meet the conditions agreed between you and CIP, you would be liable to pay back. (example: failure to implement the agreed milestones)

The maximum amount is RM150,000. However, it is delivered in tranches (sections) which means for tranche 1 the maximum amount is RM50,000. If you qualify you can apply for tranche 2 and 3 which is worth RM50,000 each.

For Cradle Investment Programme or called CIP focuses on many areas for pre-seed funding. If your business idea is related to the industry below, you are on track for the funding:

• Software and information services
• Internet: e-content, e-commerce & e-content
• Communication and networking: mobile data
• High-tech consumer and business products
• Electronic and semi conductors
• Medical devices and advanced materials
• Biotechnology and life sciences
• Environmental resources management and renewable energy
• Technology innovation created for any industry

Eligibility criteria is as below:

• Malaysians and aged 18 above
• Minimum 2 applicants to maximum 5 applicants

What are the allowable expenses (these are the only expenses allowed, no such thing where you get RM50,000 in cash, the funds are utilized only for the allowable expenses):

• Development of prototype
• Business Plan
• Purchase of market feasibility research
• IP search and registration
• Survey on statistical data
• Product sampling expenses

The product I mentioned above was CIP but there is also another product called U-CIP which focuses on research products created by university researchers to transform it into a prototype.

For more information, go to

• http://www.cradle.com.my
• call +603 2166 4730
  
• mail: enquiries@cradle.com.my
  

Download the documents below to know more about the programme:

• Application Form Guide
• Allowable Expenses
• CIP Catalyst Process & Timeline

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