Economy Empowerment

Ministry of Rural and Regional Development (KKLW) Rural Industries Development Programme

Objectives Of The Scheme

  • To increase the number of rural Bumiputera entrepreneurs in all dynamic and legal economic areas.
  • To upgrade the industries of rural entrepreneurs so they become more dynamic, competitive and resilient as well as to boost their commitment.
  • To provide funding facilities for rural Bumiputera entrepreneurs in order to help improve the rural economy.
  • To provide a collateral-free funding scheme with a low instalment rate.
  • To increase the involvement of rural Bumiputera entrepreneurs in rural economic activities that has more potential and is more dynamic in order to create a Bumiputera Trade and Industry Community (MPPB) among rural residents.

Implementing Agencies

  • Small Medium Enterprise Development Bank Malaysia Berhad for funding that involves the manufacturing, services and rural tourism industries.
  • Bank Kerjasama Rakyat Malaysia Berhad  (Bank Rakyat) ) – for funding that involves the manufacturing, services, agriculture and rural tourism industries.
  • SME Bank

Features Of The Scheme

Concept of Funding

  • Funding based on Syariah concepts (Ijarah Thummalbai, Bai Bithaman Ajil, Bay-Dayn and Al-Quran Hassan)

Purpose of Funding

  • Purchase of machines/equipment that would help to upgrade the business/industry
  • For working capital to be used for the purchase/procurement of raw materials
  • For renovating or upgrading the premise of the business/industry

Limits of Funding

  • RM20,000.00 – RM250,000.00 (for entrepreneurs who have been in operation for less than three years)
  • RM250,000.00 – RM500,000.00 (for entrepreneurs who have been in operation for more than three years)
  • Funding is allowed for as much as 3 times but may not exceed the maximum limit that the applicant is entitled to


Repayment Period

  • 3 to 5 years (loans of RM250,000.00 and below)
  • 5 to 7 years (loans of RM250,000.00 – RM500,000.00)

Grace Period

The initial payment for 6 months starting from the date the loan is released.

Awarding of Grants

The awarding of grants will be considered for loan borrowers who have received loan funding of RM250,000.00 or below and have fulfilled the following criteria:

  • They have repaid 70% of the loan
  • They do not have any outstanding instalments
  • They have maintained a good business performance after receiving SPED funding

Rate of Service Charge

  • 5% per annum based on loan balance

Scope Of Funding

  • Manufacturing Industry
  • Commercial Agriculture
  • Services Industry
  • Rural Tourism

Non-Funded Economic Activities

  • Large scale industries/businesses such as the exploration and excavation of petroleum/minerals, housing projects and hotels.
  • The purchase of fixed assets for the purpose of reselling them or renting them out, such as industrial sites/land, shops and factories/workshops.
  • The purchase of vehicles for public transportational use.
  • Loans for the purpose of debt-repayment.

Conditions For Application

  • The business/industry is wholly (100%) Bumiputera-owned.
  • The business/industry is registered with the Companies Commission of Malaysia.
  • The industry/business is based in rural areas, i.e. outside the major cities and cities of Petaling Jaya, Subang Jaya and Putrajaya.
  • The entrepreneur is involved in the business/industry full-time.
  • The business premise is not a residential premise.
  • The entrepreneur or the company has never received loans of over RM250,000.00 from other banks or financial institutions. However, SPED funding would still be applicable if such loans have been fully repaid.
  • The entrepreneur observes all government regulations including the codes on Food Hygiene Practice and Industrial Waste and the Environmental Pollution Act.
  • The applicant is not over 60 years old.



  • Machines/equipment will be funded based on the agreement that the machines/equipment will be consided as the loan collateral.


  • The borrower must take an insurance policy to cover the machine/equipment throughout the loan repayment period.
  • For loans made not for the purpose of purchasing machines, the insurance policy requirement will be decided based on certain necessities such as to take up life insurance instead.

Stamping And Legal Costs

  • The Implementing Agency will charge stamp duty fees on the Ijarah, Ijarah Thummalbai, Bal’Bithaman Ajil Al-Qardhul Hassan agreement document or other documents and legal fees based on standard and reasonable rates.
  • Conditions that may be introduced from time to time.

Release Of Funds

  • The Implementing Agency will release the loan after the following rules and conditions are complied with:
  • To sign the Loan Agreement document.
  • To submit invoices of purchases and others that has been made in the bank’s name.
  • To accept the offer, conditions and rules as stated in the Offer Letter.
  • To acknowledge the receipt of machines/equipment through the Certificate of Acceptance and Satisfaction document.
  • To submit a Comprehensive/All Risk insurance note/policy.
  • To submit legal fees and other costs including for the preparation, registration and stamp duty of related documents.

Scheme Implementation Committee

  • The application is processed at 2 Committee levels:
  • Technical Evaluation Committee – the Bank to become secretariat
  • SPED Main Committee – the Ministry of Rural and Regional Development to become secretariat.

Application Procedure

  • The early steps to take for an SPED application are as follows :
  • Use the SPED Application Form that may be obtained at the Head Office or Brancj Office of the Implementing Agency or at KKLW.
  • The guide to filling up the form and preparing a project paper is included along with the application form.
  • Two (2) copies of the application form must be filled and be submitted together with the project paper and related documents as follows :

THE FIRST SET is to be submitted to KKLW so as to be screened based on its compliance with policies, conditions and scope of funding.

THE SECOND SET is to be submitted to the Implementing Agency i.e. the Bank for a technical evaluation on the aspects of management, marketing, finance and project potential.

  • The application will be processed once the form and the project working paper have been completely filled.
  • If the application is not complete, a period of 30 days will be given for the applicant to complete the application. Once this period expires, the application will not be considered and the applicant will be considered no longer interested in the application.

Decision of Application

  • The decision of the application will be informed via the Implementing Agency. For rejected applications, the applicants will be directly informed by KKLW.
  • Successful applicants are required to sign a loan agreement with the Implementing Agency.
  • Loan money for purchasing machines/equipment and for working capital will be paid directly to the supply by the Implementing Agency.

Related Forms and Guides :