Recognition for three Financial Institutions For SME Financing

PETALING JAYA, June 25, 2014: Credit Guarantee Corporation Malaysia Berhad today awarded three leading financial institutions (FIs) for their noteworthy and substantial contributions towards SME financing and development in 2013.

The winners for CGC’s 19th Top SME Supporter Award were Maybank, Standard Chartered Bank and Public Bank Berhad.

Once again, Maybank emerged the winner for the Best Financial Partner Award 2013 and the Top Bumiputera SME Supporter Award 2013. Maybank had won both the awards for its contribution to the SME financing in 2012 as well.

All the three award recipients contributed a total of 1,076 loans, representing 45% of the loans approved by CGC in 2013.

The award recognition first introduced in 1996, is a proactive move to encourage FIs to increase their participation in SME sector development as well as complement the efforts of the Government in encouraging FIs to avail financing to SMEs.

The awards were presented by CGC Chairman Dato’ Agil Natt, witnessed by CGC President and Chief Executive Officer Datuk Wan Azhar Wan Ahmad at CGC’s headquarters in Petaling Jaya, after its 41st Annual General Meeting earlier.

Datuk Wan Azhar said for 2013, CGC’s SME outreach improved by 45% with a total of 2,368 SMEs mostly in the general businesses, manufacturing and agricultural sectors benefiting from RM1.5 billion worth of loans approved.

He added that financing was availed to the SMEs largely through CGC’s main schemes such as the Enhancer and Direct Access Financing Scheme (DAGS), Portfolio Guarantee and the Bumiputera Entrepreneur Project Fund (TPUB-i).

Datuk Wan Azhar said on the financial sustainability agenda, CGC had again posted a healthy profit of RM121.0 million and this development augured well for CGC’s continued SME outreach agenda in particular its developmental role serving the underserved SME segment.

“CGC’s operating cost in 2013 declined to RM160.7 million from RM228.4 million in 2012 mainly due to lower provision for claims and lower allowance for impairment attributed to rigorous credit monitoring activities,” said Datuk Wan Azhar.

He said provision for claims on loans guaranteed by CGC reduced to RM61.8 million compared with RM81.3 million in 2012 primarily due to the improvement in credit and risk awareness culture that placed greater emphasis on maintaining good asset quality. The provision for claims reduced by 24% and impairment, by 65%.

“Overall, we have a healthy financial position and we were able to repay the RM700 million loan provided by Bank Negara Malaysia promptly in November 2013.”

Datuk Wan Azhar said the strategic direction of CGC in 2014 is continue to deliver the best for the SMEs and the financial institutions. “This year, we are focused on three main areas: firstly, to avail greater financial access to the under-served segment especially the Start-ups. In this direction, we have rolled out the Syariah-compliant direct financing scheme, the BizMula-i in May 2014.”

“In addition to that, we will step up our efforts to support the national Bumiputera development agenda by offering higher guarantee cover and lower cost of borrowing. We have introduced the Bumiputera Portfolio Guarantee scheme and banks are already participating in the scheme. More of such initiatives will be undertaken this year to further avail greater financial access to the Bumiputera SMEs.”

“We will also continue to ensure more of our customers benefit from the rebate mechanism that we have implemented early this year to assist the SMEs to cope with the escalating cost of doing business,” added Datuk wan Azhar.

“These are three of the seven initiatives that we will place greater focus in 2014. Other focus areas include performing developmental role in a financially sustainable manner, managing government-funded schemes, enhancing operational efficiency and relationship with our bank partners,” said Datuk Wan Azhar.

In 2014, CGC targets to guarantee 5,600 of SMEs loans valued at RM2.7 billion. Since its inception in 1972, CGC has guaranteed 422,585 SME loans worth RM52.9 billion.

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