Press Release
For Publication or Broadcast
21st May 2007
CGC Recognizes Financial Institutionsí
Contribution Towards SME Development
Petaling Jaya, 21 May – Five leading financial institutions were formally recognized for their significant contribution towards SME development in 2006 by Credit Guarantee Corporation Malaysia Berhad (CGC) today. The financial institutions were Maybank, CIMB, EON Bank, OCBC and RHB Bank who received the Top SMI Supporter Award from CGCís Chairman Datoí Zamani Abdul Ghani at the awards presentation ceremony held at its head office in Petaling Jaya.
Maybank and CIMB Bank once again emerged as the Top SMI Supporters, making it their 12th award since the Award was inaugurated by CGC in 1996. For RHB Bank and EON Bank, this is their 7th and 2nd award respectively. The five award recipients contributed RM2.5 billion, representing 83% of the total loans guaranteed by CGC in 2006.
Held in conjunction with the Corporationís 34th Annual General Meeting, the 12th edition also witnessed the recognition of OCBC, a foreign-owned bank under CGCís Top SMI Supporter-Foreign-owned Bank category, introduced for the first time in 2006. CGC introduced this new category basically to demonstrate its appreciation to the foreign-owned banks for their support towards the development of local SMEs and also to further encourage their continued participation in its credit guarantee schemes.
Speaking to reporters at a press conference after the award presentation ceremony, CGCís Managing Director Datuk Wan Azhar Wan Ahmad said that foreign-owned banks have shown increasing interest in supporting the local SMEs, which has great potential for growth in the coming years.
ìWe have seen their increasing interest not only in supporting the local SMEs directly but also through their participation in our credit guarantee schemes. It is an encouraging trend that CGC will continue to promote,î added Datuk Wan Azhar.
He further emphasized that with the foreign-owned banks showing more interest in financing the SMEs, local banks are expected to step up their efforts to face off the increasing competition in this market.
ìThe healthy competition among the banks would greatly benefit the SMEs in terms of access to financing as they will not only have greater options but also enjoy the convenience of the extensive network of the banksí branches nationwide,î stressed Datuk Wan Azhar.
ìWith the signing of the Memorandum of Understanding with eight Islamic financial institutions in February this year, we are also considering another new award category to recognize the contribution of these Islamic institutions,î said Datuk Wan Azhar.
The award recipients were selected based on the fulfillment of the various criteria set by the Corporation, amongst others, are the total value of loans guaranteed, loans growth, rate of default and rate of recovery.
In the financial year ended 31st December 2006, the Corporation sustained its loans growth at a respectable level of over 7,500 SME accounts valued at slightly over RM3 billion, benefiting largely the general business, manufacturing and agricultural sectors. CGC registered 21.2% increase in revenue, posting RM243.6 million in 2006 as opposed to RM200.9 million in the corresponding year.
ìWith the increasing participation of the conventional banks and the Islamic financial institutions in CGCís credit guarantee schemes coupled with the introduction of new and revised products, we are optimistic of achieving our target of RM4.5 billion in 2007,î said Datuk Wan Azhar.
On its 3-year Business Transformation Plan that it embarked on in 2006, Datuk Wan Azhar said it is on track with several of the strategic initiatives outlined under the plan having been implemented and have progressed substantially. These include the expansion of the scope of its guarantee beneficiaries to Islamic and development financial institutions, the establishment of a joint venture company with an international partner to provide equity funding to SMEs, securitization of SME loans and the introduction of risk-adjusted pricing structure in its guarantee schemes as well as strengthening of its institutional capacity in the areas of human capital management, IT infrastructure and corporate governance.
CGC has cumulatively guaranteed more than 360,000 SME establishments with a loans value of RM35.14 billion since its establishment in 1972.
Brief on CGC
Credit Guarantee Corporation Malaysia Berhad (CGC) was established on July 5, 1972. Current shareholders are Bank Negara Malaysia (major shareholder) and all commercial banks. CGC has 16 branches nationwide which were established since year 2000.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 also expanded its role by providing business advisory services, i.e. assisting SMEs who are unfamiliar with the procedures involved in preparing the required documents for financing through its panel of Business Advisory Service Entity (BASE).
For Media Enquiries:
Siti Badarny Hassan
Public Relations and Special Programme
Tel: 03-78062300 ext 231
E-mail: [email protected]
12-Jun-2007 17:21:26 PM