MIDF's latest scheme extends lifeline to struggling companies - Zafrul

 

The Malaysian Industrial Development Finance Berhad’s (MIDF) Second Chance Financing scheme extends a lifeline to struggling companies, enabling them to continue their operations, redefine their strategies and ultimately contribute to the growth and development of Malaysia’s economy.

Investment, Trade and Industry Minister Tengku Zafrul Abdul Aziz said without such support, the country could be stifling innovative companies with valuable ideas, products or services.

"I am happy to see that MIDF has applied innovative and inclusive criteria in its new financing scheme - the ‘Second Chance Financing’.

"In our challenging and ever-evolving economic landscape, it is not uncommon for companies to encounter tough times," he said in his keynote address at the launch of MIDF's Second Chance Financing scheme in Kuala Lumpur today.

The minister noted that a sudden shift in market conditions, unforeseen disruptions, or internal struggles can push commercially promising companies to the brink of failure.

"It is, therefore, crucial that we consider such companies’ potential for recovery and the longer-term benefits of supporting them to get back on their feet again.

"Companies with a decent business model do get unlucky sometimes, and unless we place some faith in them, we will never know if they are at an inflection point that requires just a little support for them to recover and start growing again," he said.

Support for ecosystem

More importantly, he added that giving these companies a financing lifeline also supports their whole operational ecosystem, which comprises their suppliers, customers, and employees, all of whom collectively contribute to the nation’s socio-economic growth.

"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 businesses and SMEs as possible.

"I hope businesses and SMEs facing a tough time will take advantage of MIDF’s Second Chance Financing and other facilities to stay afloat, and eventually thrive," he said.

By taking this strategic approach, he said Malaysia is effectively fostering innovation, preserving jobs, and preventing systemic disruptions, to lay the foundation for a stronger, more resilient business environment in the country.

MIDF said that by providing alternative funding sources and initiatives like the Second Chance Financing scheme, the government aims to empower SMEs through agencies like MIDF. This would not only facilitate their recovery and keep them afloat but also promote innovation, job preservation, and overall economic stability.

"Providing access to financing prevents a ripple effect that could impact other sectors of the economy.

"Business interconnectedness means that the failure of one company can have far-reaching consequences and financial support helps stabilise troubled companies, allowing them to meet their obligations and maintain stability throughout the ecosystem," it said.

- Bernama