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Updates as at 30 December 2022. Subject to amendments and further information.


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Managing debt for a resilient business

When & Why is Debt Management Required

  • Any experienced entrepreneur would agree that there are many challenges in setting up and running a successful business. Resilient and successful businesses are able to develop and expand as they progress along the SME life cycle from start-up to growth and expansion phase all the way through maturity.
  • There are times, however, where businesses face significant financial stress as a result of both external and internal factors such as a natural disaster, unprecedented pandemic, challenging operating environment, internal fraud, wrong business decisions and stiff competition. The ability of the business to weather through such challenges is critical to its survival.

It’s All About Cash Flow

  • Positive cash flow is crucial to any business as it is a strong indicator that the business is sustainable and viable. With good financial management and capital budgeting, a business will be able to reflect the sustainability and viability of its practices.
  • A business may be extremely profitable with soaring revenues/sales volumes but the inability to collect the ballooning amounts due from credit sales on a timely basis could be detrimental to its financial health. Whilst the revenue and cash flow generated would be able to meet the business’s capital and operational requirements, they remain insufficient to meet its financial obligations.
  • At times, the business is in such a dire situation that it is unable to generate sufficient cash flow to even support its business operations, pay its creditors and bank loan repayments as and when they fall due.

Turning It Around

  • Setbacks may be temporary and businesses can be turned around or revived through new business strategies and business planning, e.g. venturing into new product lines, cessation of loss-making products, changing marketing strategy, embracing digitalisation and adopting cost-cutting measures.
  • For example, a trading company may be experiencing tight cash flow due to some uncollectable payments from its customers which have resulted in extended ageing of its receivables. A quick fix would be to intensify collection strategies and temporarily conduct the business on a cash term basis. At the same time, the business would also require some financial reprieve in repaying its financial obligations with the financial institutions.

Save Your Business – Seek Debt
Management Assistance Early

  • Under these circumstances and when the entrepreneurs/business owners are genuine and committed to resolve their financial predicaments; they should come forward to resolve their predicaments with their existing lenders.
  • Objectives of debt management:
    • To give breathing space to owners to focus and re-strategise
    • To provide time for the business to turn around
    • To structure R&R according to the customer’s profile, needs and repayment capabilities (considering business and turnaround plans)
  • When should SMEs start to seek assistance if they face business cash flow problems?

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Common Debt Management Proposals

Debt Management Arrangement to Cater to Specific Business Needs

​​​​Financial institutions will work with the SMEs to identify the most suitable arrangements in support of their business and their commitment in meeting their loan repayment obligations.

Some common debt management proposals that SMEs can explore with their bankers are as below:


Reduction in the monthly instalment amount and the lengthening of the facility tenure


Reduction of interest/profit rate


Partial or full waiver of interest/profit payments


Conversion of working capital facilities (e.g. overdraft & trade lines) to term loan with appropriate tenure based on repayment capability


Minimum interest payment at the initial period with a step-up structure for principal repayment/interest payment


Moratorium for payment of principal and/ or interest over a specific tenure

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Want to learn more about financial landscape, financial planning and other relevant knowledge for your business? Check out our Financial Education section to be more financially informed!

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The world we live in is increasingly complex, especially for the youths, and they will eventually need to take charge of their future and finances. Financial education in the tertiary stage is for those between the ages of 18 to 25 currently pursuing post-secondary education. Providing them with the appropriate financial know-how at this point will build up their competence in dealing with future financial decisions. This module focuses on cash flow management, the importance of savings and setting up a budget, internet banking and other appropriate topics for university and college students.

Entering Workforce

This stage comprises those between the ages of 20 to 30, i.e. mainly those who are just starting out in life. Financial education is essential to this age group as they learn to be independent in most matters especially financial management. In their minds, a car is a want rather than a need, and normally sits at the top of their list of things to acquire. Our Entering Workforce module focuses on understanding the fundamentals of borrowing and the importance of borrowing productively to encourage positive net worth. Financial education at this stage is also aimed at inculcating the habit of managing debts wisely. The module also introduces the fundamentals of investments and the importance of insurance for a better tomorrow.

Starting and Raising a Family

The module for the next life stage is for those who are starting and raising a family. People in this category are approaching that time in their life when they will normally experience important and meaningful life’s milestones: marriage, children and a new home. Designed for those between 30 to 40 years of age, this module will focus on settling unproductive loans while reducing debt commitments as they prepare for retirement. Emphasis will again be placed on the importance of planning for and protecting against uncertainties by talking about the types of financial tools available. They will learn the various types of insurance policies and be able to decide on the best coverage based on their affordability for their precious family. Education will also be given on the appropriate investments that will provide passive income for a better tomorrow.


The transition from working to retiring involves many tough decisions regarding income and lifestyle needs and whether one plans to ease into retirement or otherwise, while considering factors such as wealth management, whether a pension is enjoyed, and EPF balances. These are big decisions with long-term impact on their financial well-being during retirement. To make the best choices, they require sufficient knowledge and intense awareness of how they want to live through their retirement years. Therefore, our pre-retirement module will prepare them for retirement by teaching them the proper use of their investments and review of their portfolio while servicing their insurance policies and settling unproductive debts to improve their net worth positively.

Post – Retirement

You have retired. How would you manage your money now? Considering that the average life expectancy in Malaysia has improved, it is more important now than ever to ensure that you have the financial resources to live a comfortable and happy lifestyle—particularly if you are looking forward to retiring with peace of mind. Taking care of your wealth and making it last are important at this stage. Financial literacy and education is a continuous life lesson that does not end at retirement. Now, more than ever, you need to manage your finances wisely and plan for the unexpected. Our post-retirement module is focused on those who are currently transitioning into retirement or are in the early stages of retirement.

Early Adulthood
Adult – Middle Adulthood