Petaling Jaya, 3 January – Credit Guarantee Corporation Malaysia Berhad (CGC), the leading SME-support institution in the country, will be offering rebates on its guarantee fee to their customers as a reward for timely repayment and good conduct of their loan account.
With the implementation of the rebate incentives, more than 1,800 of CGC borrowers are expected to benefit between 2% to 15% of discount on their annual guarantee fee in 2014. Currently, CGC’s guarantee fee ranges from 0.5% to 5.75% with the average fee of about 3.9% for the unsecured loans.
Borrowers eligible for rebates are those that do not have any adverse record on the existing loan facility with CGC and the loan guarantee should be active for a minimum of one and a half years. The rebate will be made available to eligible customers upon annual review of their account and is applicable to all CGC’s guarantee schemes.
With CGC’s guarantee cover, the SMEs are able to secure financing from RM50,000 to RM10 million from the financial institutions.
“The rebate offered is one of the proactive measures undertaken by CGC to ease the cost of borrowing for the SMEs, in light of the recent overall escalation in the cost of doing business. We have allocated about RM1.7 million worth of rebates for this purpose,” said CGC’s President and Chief Executive Officer, Datuk Wan Azhar Wan Ahmad.
“By rewarding the right customers, we are sending the message that it pays to conduct the loan facility properly and thereby promoting a sound credit culture amongst the SMEs,” added Datuk Wan Azhar.
Datuk Wan Azhar also reiterated that CGC, being in the forefront of SME development, had taken several initiatives in the recent years to address critical issues faced by the SMEs especially with access to financing, cost of borrowing and more importantly, the turnaround time.
“Amongst others, we have forged strategic partnerships with eight (8) leading banks to create not only alternate but also quicker access to financing via the portfolio guarantee scheme,” added Datuk Wan Azhar. “And to help SMEs cope with the escalating cost of borrowing, we had introduced the ‘blended rate’ formula and ‘risk-adjusted pricing’ mechanisms, which place a capping on the interest rate that the financial institutions (FIs) may levy on loans guaranteed by CGC and to rate a borrower according to their individual risk profile, respectively.”
In 2014, CGC is targeting to provide RM 2.7 billion of financing benefitting about 5,600 SMEs by focusing on four main segments namely the Start Ups, Bumiputera entreprenuers, new growth sectors and Syariah-based financing.
About CGC
Credit Guarantee Corporation Malaysia Berhad (CGC) was established on July 5, 1972. Current shareholders are Bank Negara Malaysia (major shareholder) and commercial banks. The core business focus of CGC is to assist SMEs, especially those without or with inadequate collateral and track record to obtain credit facilities from financial institutions by providing guarantee cover on such facilities. CGC has cumulatively guaranteed more than 420,000 loans valued at close to RM52 billion since its establishment.
Today, CGC is well on track to achieve its financial sustainability agenda as envisaged under its business transformation plan. In the last three (3) years, CGC has registered an increase in its net profits ranging from RM15.6 million in 2010 to RM160.8 million in 2012.
CGC, known as the ‘credit firm for the small man’ in its early years, focused on helping small enterprises in the agricultural, commercial and industrial sectors. As the Malaysian economy expanded over the years, the demand for CGC’s guarantee services also grew in tandem. The range of products and services were also expanded to cater to larger credit facilities required by medium-sized SMEs.
CGC’s support for SME’s is not only confined to the provision of loan guarantees and financing facilities, but also credit information and credit rating services through its subsidiary Credit Bureau Malaysia. Through the Bureau, CGC assists SME’s to build a credit history and track record to enhance their credibility and bankability to secure financing on their own merit and at reasonable cost.
Other funds currently managed by CGC include the Green Technology Financing Scheme (GTFS) and the Bumiputera Entreprenuer Project Fund (TPUB-i) with a total allocation of RM3.5 billion and RM300 million respectively. To date, CGC had managed a total of 42 guarantee schemes including 16 government-funded schemes.
To date, 15 Islamic banks, 17 commercial banks and seven (7) development financial institutions (DFIs) are participating in CGC’s guarantee schemes, providing customers with a wide network of more than 2000 branches nationwide to avail financing.
SMEs wishing to obtain more information on CGC may call its Client Service Centre at 03-78800088 or visit www.cgc.com.my.
For media enquiries:
V. Kumaran
Head, Corporate Communications
Tel: 03-7806 2300 ext 232
HP: 016-638 1747
Email: [email protected]”