Press Release 6 February 2007
CGC and Islamic Financial Institutions forge Strategic Partnership to accelerate SME growth and drive new opportunities
Kuala Lumpur, Tues 6 Feb – The development of the small and medium-sized enterprises (SME) took a significant step forward today as Credit Guarantee Corporation Malaysia Berhad (CGC) and eight Islamic Financial Institutions announced their strategic partnership that has the potential to increase SMEs access to financing as well as open up new growth opportunities for the institutions.
This decisive step, a customer-centric approach taken by CGC and the Islamic financial institutions, will provide a wider avenue for the SMEs to avail themselves of the varied financing facilities to be made available through the institutionsí network of branches nationwide.
The eight participating Islamic financial Institutions are Affin Islamic Bank Berhad, AmIslamic Bank Berhad, Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, CIMB Islamic Bank Berhad, EONCAP Islamic Bank Berhad, Hong Leong Islamic Bank Berhad and RHB Islamic Bank Berhad.
Speaking to reporters at the launch of this strategic partnership, CGC Chairman Datuk Zamani Abdul Ghani said that the initiative is indeed an extension of the Corporationís on-going efforts to be in the forefront of SME development in the country. ìThis strategic move is in line with the Corporationís transformation exercise embarked a year ago to assist SMEs through new channels,î added Datuk Zamani.
The collaboration with Islamic financial institutions, Datuk Zamani said, is a testimony of CGCís conscientious efforts to find new ways of assisting the SME community that requires financial and developmental support. ìCGC has anticipated an increasing demand for alternate sources of financing from SMEs, especially Syariíah-compliant financing schemes in the light of the fast developing Islamic financial system in parallel with the conventional structure in Malaysia. The initiation of guarantee schemes in Islamic finance complements our overall efforts in the development of Islamic finance as an effective driver of economic growth,î explained Datuk Zamani.
ìIt will not only enable CGC to assist SMEs requiring Islamic guarantees but also help expand its financing base to more customers requiring Islamic facilities. The collaboration also paves the way for CGC to make further inroad into Shariíah-based Islamic financing,î he added.
With this collaboration, it is anticipated that CGC and the Islamic financial institutions will step up their efforts even further to assume a greater role in SME development as envisioned by the National SME Development Council. The concerted efforts by both parties will bring mutual benefits as the Islamic financial institutions are able to extend more financing to its customers with CGC guarantees while on the other hand CGC is able to reach out to new SME customers.
In terms of volume of business, Datuk Zamani revealed that this collaboration is expected to generate RM300 million in 2007.
Year 2007 marks the 2nd phase of CGCís transformation plan where expansion of products and services will be given greater prominence. In addition to extending the guarantee facilities to Islamic financial institutions and development financial institutions, CGC will expedite its efforts in the provision of equity financing as well as securitisation of SME loans. ìThese initiatives are expected to facilitate the Corporationís entry into capital market activities intended for the development of SMEs,î said Datuk Zamani.
He explained further that the new CGC will take a more holistic approach to address SMEs ëaccess to financingí by offering not only conventional and Islamic guarantee products but also non-financial ancillary services i.e. advisory services on financial and business management, marketing and other business aspects to strengthen the capacity and capabilities of SMEs.
CCG, a leading credit enhancer in the country for more than three decades, has to-date been instrumental in the establishment of about 360,000 businesses, guaranteeing over RM35 billion worth of loans.
With the launch of this strategic partnership with the Islamic financial institutions, CGC hopes to see more opportunities and avenues to support the SME sector which remains the key driver of nationís economic growth.
For more information please contact:
Siti Badarny Hassan or V. Kumaran
at 03-7806-2300 ext 231/232
27-Jun-2007 15:23:28 PM