1. Our project is located in Muar, Johor. Should we submit our application for financing to MIDF’s head Office in Kuala Lumpur or to MIDF’s regional office in Johore Bahru for faster processing?

Answer: The application should be submitted to the regional office for processing. If the applicant’s main office is located in Kuala Lumpur while the project is located in another state, then the application may be submitted to MIDF’s Main Office in Kuala Lumpur.

2. We understand that MIDF is one of the implementing agency for financial assistance programmes which are funded by the Government of Malaysia. How do we apply for financing under these financial assistance programmes? Should our application be submitted to the relevant governmental agency or to MIDF for processing?
Answer: Applications for financing should be submitted to MIDF for processing, evaluation and consideration for approval.
3. We have read brochures of your financial assistance programmes and are interested to apply for financing from MIDF. Can we negotiate for a lower interest rate?
Answer: Profit /Interest rates levied under the various MIDF financial assistance programmes had been set in consultation with the Government of Malaysia and are non-negotiable. These rates are competitive and range from 3% to 5% per annum on yearly rest depending on which of the financial assistance programmes that the financing is being extended.
4. How long does it take for MIDF to approve our application for financing?
Answer: MIDF’s financing processing is ISO 9001:2008 certified. Once full information has been received from the applicant, within 30 days thereafter, the application will be considered for approval and the decision will be made known to the applicant.
5. What are the items and sectors which are eligible for financing by MIDF?
Answer: Fixed assets such as industrial / commercial land and buildings, machinery/equipment, motor vehicles and related installations, fittings and fixtures as well as working capital used in the manufacturing, manufacturing-related services and services sectors are eligible for financing by MIDF.
6. Does MIDF provide 100% financing for the costs of the fixed assets to be acquired by customers?
Answer: MIDF provides financing of – up to 100% for factory mortgage financing, up to 90% for new machinery and motor vehicles, up to 65% for secondhand machinery and motor vehicles and up to 100% for working capital.
7. What are the repayment periods of financing taken under the various financial assistance programmes that MIDF has to offer?
Answer: Please refer to the preceding pages of this link for details.
8. We are applying for financing of machinery from MIDF. The machinery will be purchased by us directly from an overseas supplier. Can MIDF open a letter of credit to facilitate the importation of the machinery?
Answer: Subject to the financing application having been approved, the legal documentation having been completed to the satisfaction of MIDF, and all conditions precedent to disbursement having been fulfilled, MIDF may consider opening the letter of credit on behalf of the customer through a commercial bank. All fees and expenses payable in relation to the letter of credit are to be borne by the customer.
9. Our financing application has been approved by MIDF but we may have to postpone or delay the implementation of our project due to unforeseen circumstances. Can MIDF consider extending the validity period of the approval given in the letter of offer for the financing facility?
Answer: The request can be considered with adequate explanation and proper justifications to be provided by the customer. However, if the requested extension period is relatively long, then MIDF will have to re-evaluate the application and the project at a subsequent juncture and the initial validity period shall lapse. Notwithstanding this, MIDF reserves the right not to consider any request for extension.
10. We are not sure which particular soft loan scheme to submit our application for financing under and whether our application will meet the required criteria. How can we seek advice from MIDF on our queries?
Answer: Please contact us at inquiry-feedback@midf.com.my and we will respond to you shortly. Alternatively if you are located outside the Klang Valley you may also contact our branch which is closest to you directly. We have branches in Penang, Johor Bahru, Kota Baru, Kota Kinabaly and Kuching (contact details are on our CONTACT US page)
11. Can MIDF agree to our request that our solicitors prepare the legal documentation of the MIDF financing facility?
Answer: Only solicitors appointed by MIDF from its panel of solicitors are allowed to prepare legal documentation of financing facilities.
12. Once all the pre-disbursement conditions have been complied with by the customer, will the financing be disbursed by MIDF directly to the customer?
Answer: In the case of Islamic Term Financing-i, after a prior written Letter of Indemnity has been given by the customer to MIDF, the financing amount will firstly be disbursed to the machinery/equipment or motor vehicle suppliers or the developers / building contractors or raw material suppliers for any amounts still outstanding and owing by the customer and thereafter the balance, if any, will be reimbursed to the customer for costs incurred and paid for by the customer.

In the case of industrial hire purchase or Al-Ijarah Thumma Al-Bai (AITAB) facilities, after a prior written Letter of Indemnity has been received from the customer, MIDF will disburse the financing amount directly to the machinery/equipment/motor vehicle supplier to settle the balance of the purchase price of the machinery/equipment or motor vehicle.
13. What are the types of collateral required by MIDF to secure financing facilities?
Answer: The collateral normally consists of a first fixed charge over the fixed assets financed or over other machinery/equipment or floating assets or a third-party charge over landed properties, a pledge of shares of listed public limited companies or fixed deposits or a credit guarantee from Credit Guarantee Corporation Malaysia Berhad.
14. MIDF offers both Shariah-based and conventional financing facilities. Are the profit rates of the Shariah-based financing and the interest rates of the conventional financing competitive with each other?
Answer: Both the profit rates and the interest rates are competitive between both types of financing.
15. Are there adequate funds to meet SMEs’ financial needs?
Answer: Concessionary funds have been the mainstay of MIDF where financing is targeted to certain activities and sectors within the eligibilities of specific soft financing schemes. Thus, MIDF will continue to work closely with the ministries and government agencies in identifying sources of funds.

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