KUALA LUMPUR: SME Bank unveiled its RM3bil sustainability sukuk wakalah programme which will focus on six initial key sectors of energy, manufacturing, transport, building, waste and water.
SME Bank, an agency under the Ministry of Entrepreneur Development and Cooperatives, said on Monday it is the first development financial institution (DFI) in the country to issue a sustainability sukuk to meet its funding and working capital requirement.
SME Bank’s group president/chief executive officer Aria Putera Ismail said the proceeds from the issuances would be used to finance projects that directly support 11 of the 17 United Nations Sustainable Development Goals (SDGs).”
He said the 11 categories chosen are aligned with the green and social project categories recognised by the Asean Sustainability Bond Standards, Asean Social Bond Standards and Asean Green Bond Standards issued by the Asean Capital Market Forum (ACMF).
“The green project categories target six initial key sectors which are energy, manufacturing, transport, building, waste and water.
“These sectors have been identified by the Green Technology Master Plan to facilitate green growth in Malaysia, ” he added.
With the issuance of the sustainability sukuk, Aria said SME Bank is in the right position to promote and educate the importance of incorporating the ESG in business operations to all SMEs.
“This will enable them to build sustainable businesses, grow bigger and become enterprises that meet international standards.”
The Minister of Entrepreneur Development and Cooperatives, Datuk Seri Dr Wan Junaidi Tuanku Jaafar described the sustainability sukuk issuance by SME Bank as timely during this time of crisis whereby there is a need of balance in doing business for profit and doing good to fulfil our obligations towards the environmental, social and governance (ESG) factors.
“SME Bank’s effort to be part of the global trend is a smart move to secure a strong financial imprint in the country’s financial landscape for now and in the future.”
“Taking from this significant development, one important issue surfaces and that is, where are all our Small Medium Enterprises (SMEs) in this space of placing ESG in their DNA?
“There will come a time ESG will be the norm and our SMEs should be ready and willing to adopt its principles in their daily operations. The government, banks and relevant stakeholders who have the capacity to invoke change should take the lead and push for continuous transformation by the SMEs, ” he added.
SME Bank chairman, Datuk Seri Nazir Ariff said the AAAIS ratings accorded by the Malaysian Rating Corporation Berhad (MARC) for this sukuk wakalah programme reflected the bank’s strength and commitment in upholding this virtue.”
“SME Bank has been incorporating ESG elements in carrying our mandate since its establishment and with our very own ESG framework, coupled with its sustainability Sukuk framework, it is a step towards reaffirming and deepening the bank’s vision, ” he said.
The sole principal adviser/sole lead arranger for this programme is RHB Investment Bank Bhd and the joint lead managers are AmInvestment Bank Bhd, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and also RHB Investment Bank Bhd.
Earlier, SME Bank and the joint lead managers organised a virtual group investor presentation about the sukuk wakalah programme and its target maiden sustainability sukuk issuance to potential and interested investors.
Since its establishment in 2005, SME Bank has approved over RM35bil worth of financing to more than 19, 000 customers of which most of them are from the underserved and unserved SMEs.