Malaysia: Bank Expands SME Financing Regionally

Mar 2016
East Asia, March, 12 2016 - Maybank is aiming to grow its SME loan portfolio by 27% across the Asean region, including Malaysia, to RM28bil by the end of this year from RM22.1bil as at end-2015 on the back of strong regional outlook for small businesses.

“Asean economies are powered by the SME segment which generates about 50% of employment, and some 40% of GDP on average. The SME industry itself is growing between 8% and 28% in these markets, and presents an untapped potential for growth,” said Maybank group head, community financial services (CFS) Datuk Lim Hong Tat at a recent media briefing.

Lim noted that Maybank’s SME portfolio in Malaysia had grown by leaps and bounds following the successful rollout of its Retail SME (RSME) model in 2013. Maybank had introduced multi-pronged initiatives such as expanded touch points for improved access, faster loan processing turnaround time of about five days, innovative product packaging and hassle-free processes through its branches where SMEs would not need to submit audited accounts.

“Our initiatives have borne fruit with our total Malaysian SME loans doubling over the last five years to RM10.2bil in December 2015 and deposits rising almost 50% to RM58.4bil,” Lim said.

The bank’s Malaysian SME loans of RM10bil accounted for 4% of Maybank’s total loan portfolio of RM258bil last year. Lim expects its Malaysian SME loans to grow to RM14bil this year.

According to Lim, impaired loans for SMEs has been reduced to 1.96% last year compared to about 10%-11% in 2011 thanks to its robust risk management.

Lim added that the banking group was now focused on building its SME portfolio regionally given the increasing emphasis on the SME segment as Asean economies seek to tap into opportunities from the formation of the Asean Economic Community.

Maybank has progressively introduced the RSME model to Singapore, Indonesia, Cambodia, the Philippines, Laos and Brunei through its consumer franchise there.

This has resulted in Maybank’s regional SME loans growing by more than 35% from RM16.3bil in 2014 to RM22.1bil last year.

“We want to capture the opportunities in the region and aim to standardise our model across the region so that we can scale up fast. There is big opportunities for us to assist SMEs in the region and gain from it,” Lim said.

Maybank will also continue to engage with the local communities via non-financial initiatives including capacity and capability building programmes.

The bank will also strengthen its micro-credit financing business in Malaysia to assist small entrepreneurs. The micro-credit segment targets businesses with turnover of RM300,000 and below. As at end last year, Maybank had disbursed loans of RM36.2mil over the last three years to this segment.

Source : The Star Online

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