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MDV INTRODUCED TWO NEW INNOVATIVE FINANCING PRODUCTS – IFACTORING AND EQUITY LINKED FINANCING STRUCTURES
Thursday 13/09/2012
Offering technology SMEs a wider range of financing facilities
KUALA LUMPUR, September 13 (Bernama) -- Malaysia Debt Ventures Berhad (MDV), a wholly-owned subsidiary of the Minister of Finance Inc. today launched its two new innovative financing products, the iFactoring and the Equity Linked Financing Structures. With these newly introduced financing facilities, MDV will be able to further strengthen its support to the SMEs in ICT, Biotechnology, Green Technology and other high growth sectors with alternatives to its existing conventional and Islamic financing products. Since its inception in 2002, MDV has approved loans amounting to RM6.25 billion to 445 companies, of which approximately RM3.5 billion funded to technology SMEs.
Officiated by the Managing Director/ Chief Executive Officer of Malaysia Debt Ventures Berhad, Encik Md Zubir Ansori Yahaya, the launch introduced MDV project financing facilities for the three mandated sectors to support the SME’s technology companies growing beyond the pre-commercialisation stage, encompassing the funding of the sector’s new and expansion of CAPEX, Working Capital, and Project/ Contract received.
Speaking at the launch and media briefing on the products earlier today, Md Zubir Ansori Yahaya said, “Being one of the nation’s premier financiers, MDV is always committed in our partnership role to support SME’s development and growth by enabling SMEs to achieve a competitive edge, leveraging on our expertise on project management and due diligence, coupled with extensive products and financing solutions. With these two new funding facilities, we shall be able to expand MDV customers’ financing options in order to meet their growth requirements. Furthermore, this is also in line with the government’s effort to move the SMEs up the value chain and the mandate given to us as a catalyst of growth”.
On the products, Md Zubir Ansori Yahaya further adds, “We received quite a number of requests from our customers seeking assistance in managing their financing needs. We believe that by introducing these two new innovative products, our customers’ ability to implement their projects will be enhanced and they will have the capacity to secure more projects at one time, without worrying much on their cashflow and financial structures”.
iFactoring facility offers an arrangement between business and MDV, where MDV purchases business’s accounts receivable for immediate cash. Against the receivables purchased, MDV will make an advance payment of up to 80%, and the remaining balance is held as a contingency reserve and refunded only after the receivables have been collected. The attraction of this form of financing is the quick increase in customer’s working capital and the cashflow availability. This cashflow can be used to secure new business, and meet day-to-day cashflow requirements.
As for the Equity Linked Financing Structures, MDV offers an attractive discounted funding cost to its clients of which the financing structure will include a conversion of the outstanding balance in the facility into equity. This product is developed to expand the reach and footprint of MDV’s financing, to include higher risk but higher return technology projects in light of their potential for higher market returns. Additionally, given the potential for higher returns upon exit MDV is able to offer lower financing rates to businesses as a means to lower the cash consumption of innovative businesses as they work to build value.
iFactoring facility is utilizing the concept of Bay Al-Dayn Bi Al-Sila (via Shariah-compliant) and the contracts of Musawamah & Bay Al-Dayn, and for Equity Linked Financing Structures, it is attached to Murabahah financing product or conventional loan product. Both products offer innovative and flexible financing structures, cost effectiveness, have immediate cash flow for better returns, and have a quick processing-to-disbursement turnaround time.
Md Zubir further adds, “Based on MDV’s flexible and attractive funding structures, we expect to be able to capture a significant share of SMEs involving technology companies through our new financing products. With our innovative funding packages, we will be able to satisfy the SMEs funding requirements that have good and viable businesses in the technology sectors, especially for whom at the commercialization stage and beyond. At MDV, we embrace flexible financial accessibility and provide value-add advisory services to customers. While we want to partner with our customers at every stage of their development, our philosophy is to ensure a successful roadmap whilst maintaining their full ownership of the businesses”.
“As a business, one of the crucial components needed to grow is its cashflow and liquidity. We believe with our efforts, together with the support from the media, it will enable us to play a very significant role in raising public awareness of the availability of alternative options made by MDV”, added Md Zubir after the launch.
For more information on MDV, visit www.mdv.com.my
About MDV
Malaysia Debt Ventures Berhad (MDV) is a Premier Innovative Financier and Development Facilitator for the Information and Communication Technology (ICT), Biotechnology, Green Technology and other emerging technology sectors in Malaysia. Incorporated on 23 April 2002 as a wholly-owned subsidiary of the Minister of Finance, Inc., MDV has been entrusted to provide financing for projects in these sectors at the point of commercialisation. With a fund size of RM4.1 billion, MDV offers innovative financing solutions and nurturing initiatives to spur the growth of these sectors based on client’s needs.
SOURCE: Malaysia Debt Ventures Berhad (MDV)
FOR MORE INFORMATION CONTACT:
Name : Erlina Zahidi
Tel : 03-2617 2888 (ext 2841)
Mobile : 012-2652617
Email : erlina@mdv.com.my
--BERNAMA
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