Press Release
For Publication or Broadcast
26th May 2006
Maybank and BCB Top SMI Supporters for 11 Consecutive Years
Petaling Jaya, 26 May ñ Maybank and Bumiputra-Commerce Bank have once again emerged as the Top SMI Supporters, making it the 11th award both the institutions have won since it was first introduced by Credit Guarantee Corporation (CGC) in 1996. Also recognised were Public Bank Berhad and EON Bank as among the top four SMI Supporters for 2005.
The Top SMI Supporter Award that recognises financial institutions for their significant contribution towards the financing of Small and Medium scale Industries (SMI) and their overall participation in CGCís guarantee schemes annually, was presented by CGC Chairman Datuk Zamani Abdul Ghani at its 33rd Annual General Assembly held in Petaling Jaya.
ìThe financial institutions have been very supportive of CGCís guarantee schemes. With their support CGC has been able to play a significant role in the overall growth of the SMI sector. It is in view of their unwavering support that we recognise them annually,î said CGCís Managing Director Datuk Wan Azhar Wan Ahmad.
ìThis recognition has to a certain extent increased competition among the financial institutions as we could see that they are more aggressive in terms of their contribution towards our guarantee schemes,î added Datuk Wan Azhar.
The Corporation registered yet another commendable performance for the year under review. It guaranteed 8,567 loans valued at RM3.3 billion for all its schemes compared with 8,452 loans valued at RM3.0 billion in the previous year. With this healthy growth, the Corporationís guarantee fees income increased by 11.7% to RM73.4 million, from RM65.7 million recorded in the previous year.
In October 2005, the Corporation announced that it would undertake a transformation exercise with a commitment to further enhance its role in supporting the growth and development of competitive SMEs. CGC will be transformed from a traditional guarantee provider into an effective and financially sustainable institution that offers a wider range of products and services that better serve the current and evolving needs of SMEs.
ìIn a nutshell, the transformation exercise would reposition CGC as a commercially-driven financial institution that offers financial as well as other products and services that are complementary to those provided by the banking institutions,î said Datuk Wan Azhar.
ìWe are on track with the transformation. The first of the few initiatives that we have already completed includes the broadening of the board of directors where we have included new members with diverse and relevant expertise that are very much needed by CGC. In addition, we have forged strategic partnership with a foreign SME institution to provide the much-needed expertise to help CGC in its pursuit of establishing itself as an SME institution of choice in Malaysia,î said Datuk Wan Azhar.
The corporation experienced continued demand for its various guarantee schemes in 2005. Two new products were made available for the SMEs. The Fast Track Pro-Finance, a co-branding activity with Bumiputra Commerce Bank (BCB) that catered for the needs of professional firms, was launched last July. This was followed by the debut of the Direct Access Guarantee Scheme-Islamic (DAGS-i), which was introduced in December and which signifies its entry into the Islamic financial infrastructure in the country.
As at end of April 2006, cumulatively CGCís Islamic Banking Guarantee Scheme (IBGS) and Direct Access Guarantee Scheme-Islamic have contributed a total of 525 guaranteed loans approved with a value of RM364 million.
ìWith the presence of a guarantee system in the Islamic banking community, the Corporation is now able to meet the needs of our customers seeking an alternative to conventional methods, and thereby delivering Syariah compliant products,î Datuk Wan Azhar said.
CGCís Direct Access Guarantee Scheme (DAGS), which has played an effective role in enhancing the SMEís bankability and access to financing, has for the first time surpassed the billion ringgit mark in 2005, registering 2,349 loans valued at RM1.4 billion compared with 2,076 loans valued at RM962.9 million in 2004. This commendable growth for DAGS is a result of aggressive marketing strategies, good branch networking and loan monitoring. Demand for DAGS has seen an increase this year with guaranteed loans, as at end of April 2006, reaching 703 valued at RM423.5 million.
CGC will continue to focus more on products and services that are complementary to those provided by banking institutions and that are to be provided at competitive terms to enable the Corporation to achieve long term financial sustainability. It will also intensify further its reach to the SME fraternity via more co-branding and collaborative efforts with the financial institutions. This will enable more SMEs to benefit from the guarantee facilities offered by CGC.
In moving forward CGC will be participating in the first SME loans securitisation in the country. In addition to enhancing the capacity of financial institutions to further lend to SMEs, the securitisation would enable SMEs to indirectly tap their funding requirements from the capital market.
CGC was established with the main aim of assisting the SMEs gain accessibility to credit facilities from financial institutions. It is one of the leading institutions in Malaysia, which provides guarantee on loans to SMEs. To date, it has cumulatively guaranteed more than 380,000 loans valued at RM33.86 billion.
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