29th ANNUAL GENERAL MEETING 2001

29th ANNUAL GENERAL MEETING 2001

CREDIT GUARANTEE CORPORATION MALAYSIA BERHAD
For Publication or Broadcast
After 1600 hours
June 06, 2002

PRESENTATION OF CGC TOP SUPPORTER AWARDS
The 29th Annual General Meeting of Credit Guarantee Corporation Malaysia Berhad (CGC) held at Bangunan CGC today, witnessed the presentation of CGC Top Supporters Awards for year 2001. Tan Sri Dato’ Dr. Zeti Akhtar Aziz, the Corporation’s Chairman, presented the Award to four financial institutions; namely 3 commercial banks and 1 finance company.

The CGC Top Supporter Awards, seventh in the series is traditionally presented to acknowledge the 4 most active financial institutions for their significant contribution towards the financing of SMEs and their overall participation in CGC’s guarantee schemes in 2001. These 3 commercial banks contributed 79.1% of a total 6,352 loans, valued at RM1,133.9 million while the finance company contributed 59.2% of a total 485 loans amounting RM27.4 million in the year 2001.

The Corporation is pleased to announce that the recipients of the 2001 awards are:

COMMERCIAL BANKS
FINANCE COMPANY

Malayan Banking Berhad
Mayban Finance Berhad

RHB Bank Berhad

Bumiputra-Commerce Bank Berhad

PERFORMANCE IN 2001

The year under review saw the Corporation moving ahead with its expansion programme even in a period of global economic slowdown. The Corporation was able to continue implementing its programme towards realising its mission of becoming the One-Stop Financial Centre for Small and Medium Enterprises (SMEs) in the country. Six more branches were set up in Melaka, Kuantan, Kota Bharu, Prai, Seremban and Kuala Terengganu by end 2001. With additional two branches opened in Kota Kinabalu and Kuching in January 2002, the number of branches in operation now total 12 altogether.

Consistent with the Corporation’s enhanced role, the CGC branches will be responsible to promote the Direct Access Guarantee Scheme (DAGS), as well as to maintain close working relationships with the local business community and financial institutions. During the year 2001, CGC through its branches approved a total of 436 loans valued at RM160.4 million. This is an encouraging development as DAGS, which was introduced in July 2000, managed to record only 22 loans valued at RM 8.6 million in the initial year.

During the same period; the Corporation, with continuous support from all participating financial institutions, approved a total of 7,486 new loans valued at RM 1.9 billion. Of the total amount, 6,329 loans valued at RM 1,451.9 million were approved under the Main Schemes, which comprised the New Principal Guarantee Scheme (NPGS), Small Entrepreneur Guarantee Scheme (SEGS), Islamic Banking Guarantee Scheme (IBGS) and Direct Access Guarantee Scheme (DAGS). Apart from the Main Schemes, the Programmed Lending Schemes contributed a number of 508 loans worth RM 135.6 million. In addition, the Fund for Small and Medium Industries 2 (FSMI2) and the New Entrepreneur Fund 2 (NEF2), currently managed by the Corporation, recorded 369 loans valued at RM197.9 million and 280 loans worth RM154.5 million respectively. The decrease in terms of the number of loans guaranteed is mainly due to the termination of the micro credit scheme, the Tabung Usahawan Kecil (TUK). At the same time the global economic slowdown contributed the overall decline in loan approvals by the banking sector. In terms of the performance of guarantee schemes in year 2001, the NPGS continued to be the Corporation’s main contributor in terms of overall number and value of loans guaranteed with 51.7% and 74.0% respectively.

CGC’s ongoing efforts to further integrate its services continued to leverage on the benefits offered by Information Technology (IT). On July 9, 2001, CGC launched iGuarantee, a web service portal that enables on-line loan applications via Internet at the SMEs’ convenience. The portal creates a conducive “market place” to bring together potential SMEs borrowers and financiers while allowing CGC to provide the much-needed guarantee at the same time. To date, CGC has received a total of 406 applications via iGuarantee since its introduction.

Realising that one of the primary objective of the Financial Sector Master Plan (FSMP) is to develop Bumiputera entrepreneurs in Malaysia, CGC has also been channeling the NEF 2 through several versions of DAGS-NEF 2, DAGS-Franchise-NEF 2 and DAGS-PROSPER-NEF 2, both under conventional and Islamic banking facilities. The implementation of these new schemes is expected to benefit more Bumiputera SMEs and effectively contribute towards the economic growth of the country.

OUTLOOK

In line with the 2002 National Budget strategy, CGC will ensure adequate financing to SMIs as it continues to play a larger role in guaranteeing loans granted to the sector. It is expected that in the year 2002, the global economic recovery will continue to strengthen and contribute to the growth and development of Malaysian SMEs. The Corporation will ensure that access to credit for SMIs would continue to be made available. The Corporation’s projection for loan growth remains positive with a target of RM2.0 billion loan guarantees for year 2002.

“The Smart Partnership” concept together with the new set up Marketing and Business Development department in the Corporation is hoped to foster the Corporation’s image as well as to create a better rapport with financial institutions and other agencies. It is the Corporation’s objective to also create greater market awareness as well as to offer better service to SMEs’ financing needs. CGC will ensure that the capacity for loan guarantees for SMEs would continue to grow whilst continuously maintaining asset quality and ensuring that non-performing loans (NPLs) is maintained at prudent levels.

Following the success of administering the Fund for Small and Medium Industries 2 (FSMI 2) and the New Entrepreneur Fund 2 (NEF 2) from Bank Negara Malaysia, CGC is also being considered by the Ministry of Finance to be appointed as the administrator of various other funds for SMIs. It is hoped that CGC will continue to play an effective and prominent role in assisting the development of SMIs, hence contributing positively towards the economic growth in the country.

20-Feb-2004 13:53:44 PM