The Launching of ERS

Have business, will get $500k capital

THANKS to a new government aid scheme, small and medium enterprises with high-risk businesses but have strong export potential will now have access to capital of as much as $500,000.

The Ministry of Industry and Primary Resources (MIPR) and Bank Islam Brunei Darussalam (BIBD) yesterday launched the Export Refinancing Scheme (ERS) to help SMEs establish a strong global presence.

Under the scheme, an SME can borrow a minimum of $50,000 and a maximum of $500,000.

In a speech, Minister of Industry and Primary Resources Pehin Orang Kaya Seri Utama Dato Seri Setia Hj Yahya Begawan Mudim Dato Paduka Hj Bakar said the launch of the Export Refinancing Scheme is a step towards developing the exportability and level of trade access for local SMEs, encouraging local entrepreneurs to pursue business opportunities in key industry sectors, particularly production, processing and marketing, and other services that support the development of the sectors.

The new scheme provides direct and indirect exporters short-term financing before and after they make a delivery. The facilities are granted to companies registered and certified as an exporter. BIBD said the facility will help exporters to finance the purchase of items such as raw materials and general costs as well as to defray the expenses of delivery.

The new financing scheme will join two other existing financial assistance schemes: the Enterprise Facilitation Scheme, which has provided loans to 122 SMEs, totalling up to $42 million between 1999 to 2009, while the Microcredit Financing Scheme has provided $10 million worth of capital to 485 SMEs from 2001 to 2009.

Pehin Dato Hj Yahya said that the industry sectors outlined in the scheme were generally defined as high-risk business activities, often facing difficulty in finding financial aid. "(It is) one of the efforts that needs to be explored ... offering satisfactory returns through the use of modern technology and methods of business management and strategy and current marketing strategy," he said, adding that the focus now should be on opportunities in the export market.

The scheme is reserved for companies already exporting and those with potential to export and in the key sectors of agriculture, fisheries, manufacturing, forestry (based on downstream products), and ICT.

"ERS will (also) support programmes directly related to the implementation and development of export trade. This includes the establishment of development programmes in the form of technical support, product packaging, and other appropriate incentives," he said on the type of non-financial assistance SMEs could receive.

Permanent Secretary to MIPR, Yang Mulia Hjh Suriyah Hj Umar said, "The Export Refinancing Scheme is based on international best practices which have been adapted to the current environment conditions and business climate, where refinancing assistance for business activities and exports is one of the factors that could enable a business or company to compete and sustain in the arenas of regional and international free trade."

In a statement from BIBD, Pg Sanusi Iskandar Pg Hj Ismail, manager for the SME Service Centre, said the scheme will have a fast approval process and doesn't involve high collateral.

Also yesterday, a memorandum of understanding was signed between the MIPR and Vector Scorecard (Asia-Pacific) Pte Ltd for the Singapore firm to assess and help strengthen local SMEs.

Article taken from Brunei Times

A sketch on ERS

The launching of ERS