LAUNCHING OF THE FINANCIAL SECTOR MASTER PLAN (FSMP)
STATEMENT BY WAN AZHAR WAN AHMAD CHIEF EXECUTIVE OFFICER, CREDIT GUARANTEE CORPORATION MALAYSIA BERHAD (CGC)
As mentioned in the FSMP, one of the primary objective of the FSMP is meeting the socioeconomic objectives of Malaysia, particularly with regards to access of funding by priority sectors in the economy such as the SMIs and Bumiputera entrepreneurs.
Priority sectors such as the SMIs are essential sub-sectors of the economy that require financing. SMIs contribute significantly to the economic growth of the country. Over time, SMIs will be increasingly more significant such that it will become a vital foundation of the economy. It is therefore important to ensure adequate financing to these sectors and such provision of financing should be continuous.
As outlined under the FSMP, the lending to SMIs will be facilitated through a more efficient and expanded credit guarantee system. The CGC will play a larger role in guaranteeing the priority sectors, especially the SMIs. Besides introducing more attractive financing schemes, CGC has taken a number of steps recently to improve its operations, including the scheduled opening of new branches all over the country as well as strengthening its funding structure. At present, CGC has four branches operating in Kedah, Perak, Selangor and Johor. CGC will ultimately be operating in all states by end of this year. This infrastructure will prepare CGC for the enhanced role in the expanded guarantee scheme.
In the new framework announced under the masterplan, CGC is expected to expedite application and the approval process by the setting up of a portal whereby SMIs can apply for loans with CGC guarantee directly. Under such arrangement, the CGC would then solicit from banking institutions their proposed lending rates and guarantee requirements for the loan. Among the prospective lenders, CGC would then select the best offer, which is the one with the lowest price as well as lowest guarantee requirement. This scheme, targeted to be fully operational by this year would require full participation from the banking institutions.
Under the FSMP, CGC is expected to play a larger role in guaranteeing the SMIs. Through the guarantee mechanism the banking institutions will develop the ability to support these priority sectors, which will then assure Bank Negara Malaysia that these sectors will continue to have access to financing.
20-Feb-2004 14:07:19 PM