AmBank to boost lending to SMEs

KUALA LUMPUR: The AmBank Group aims to increase its SME lending in partnership with Credit Guarantee Corp Malaysia Bhd (CGC) to over RM1 billion by next year as part of its strategy to focus on SMEs.
Yesterday the group signed a portfolio guarantee (PG) agreement with CGC to offer a second tranche of RM300 million in financing to SMEs via AmBank Islamic.
The PG scheme launched in January 2015 started out with a sum of RM300 million which was allocated and fully subscribed by September 2015.
AmBank Group managing director of wholesale banking Pushpa Rajadurai said the second tranche, like the first RM300 million, will be accessible to mid to larger SMEs for working capital financing, however a RM150 million financing package under the scheme for small SMEs is in the pipeline.
“We would want to do more and we would like to take it (SME lending) to over RM1 billion. We will work on more packages with CGC dedicated to SMEs,” she told a press conference after the portfolio guarantee signing ceremony here yesterday.
PGs enable CGC and banks to expedite the approval and disbursement of loans to SMEs.
Pushpa said the second tranche of RM300 million is expected to be fully taken up over the next six months, where AmBank Islamic will provide financing to qualified SMEs. The second tranche has already seen 15% utilisation, with both tranches having benefitted 160 SMEs to date.
“The SME segment is one of our key growth areas and this CGC tie-up is timely for AmBank Group to increase our market share.”
AmBank Islamic aims to double its SME portfolio in the next three to four years, from 10% currently. The AmBank Group has extended RM12.15 billion worth of loans to SMEs in Malaysia.
Since PG’s inception in 2009, CGC has availed a total of RM6.2 billion worth of financing with 13 participating financial institutions. In 2015, CGC availed 8,225 guarantees and financing to SMEs valued at RM3.4 billion, of which 50% or RM1.7 billion were via the PG scheme.
CGC aims to increase its SME outreach by 15% and 5% in terms of value and number respectively. This would be done by availing 8,650 worth of guarantee financing amounting to RM4 billion whereby 70% will be via the PG scheme. CGC also intends to work with fintech companies to increase its outreach to SMEs.
AmBank also launched two financing packages AmBank BizSolutions Kontrak and the enhancement of the current financing package AmBank BizSolutions 2Trad3, which offers financing products and solutions tailored for commercial and SME customers, yesterday.