MIDF launches Second Chance Financing (2CF) scheme for struggling SMEs in Malaysia

The scheme aims to prevent firms with valuable ideas, products and services from going out of business while they face new struggles after the pandemic.

Malaysia’s International Trade and Industry Minister Tengku Zafrul Tengku Abdul Aziz has commended a new scheme, called Second Chance Financing (2CF) scheme, launched by Malaysian Industrial Development Finance (MIDF) to support SMEs in the nation that may require support in financing or advisory, but have otherwise viable products and solutions.

It comes into the spotlight, as businesses in Malaysia, particularly SMEs, having just overcome challenges from the pandemic, now face new issues such as ongoing inflationary pressures and fluctuating currency exchange rates. This may cause firms that have valuable ideas, products or services to face significant barriers, or even reach the "brink of failure" as Minister Zafrul cited,, thus resulting in lack of advancement in their respective industries.

As such, MIDF, under Ministry of Investment, Trade and Industry, has coe up with the Second Chance Financing schemes to support companies that are facing financial problems but have a viable business plan. The scheme also recognises that companies that struggle to pay loans will have difficulty in obtaining an new one, thus MIDF is ready to give entrepreneurs, whose businesses are still viable, a second chance.

In a article by Bernama, Minister Zafrul was quoted as saying: "It is important to emphasise that access to Second Chance Financing is still subject to responsible lending criteria, careful assessment of the company's viability, and appropriate monitoring by MIDF. What is key now is to market this to as many business and SMEs as possible."

"This injection of fund(s) will empower them to overcome cashflow constraints, secure the necessary resources for business continuity and settle outstanding debts,” he added, as cited in The Malaysian Reserve. 

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