KUALA LUMPUR (Sept 26): CIMB Group Holdings Bhd aims to extend RM30 billion in financing to small and medium enterprise (SME) businesses via collaborations with credit guarantee agencies established by the Government and Bank Negara Malaysia.
The group’s two subsidiaries, CIMB Bank Bhd and CIMB Islamic Bank Bhd, will collaborate with Minister of Finance Inc’s wholly-owned Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP), and Credit Guarantee Corporation Malaysia Bhd (CGC), which is 78.65% owned by the central bank and 21.35% by commercial banks in Malaysia.
This collaboration aims to mobilise financing as well as guarantee schemes that will spur the acceleration of SME growth, as businesses continue to take advantage of post-pandemic opportunities, in tandem with the economic recovery momentum, said CIMB in a statement on Monday (Sept 26).
“We continue enhancing support to all of our customers including SMEs and the newly committed RM30 billion in SME financing over the next two years, reinforcing our efforts for this important economic group,” said CIMB group chief executive officer Datuk Abdul Rahman Ahmad.
Abdul Rahman said CIMB is committed to being a partner of its SME customers and charting their next phase of growth post Covid-19.
“As a purpose-driven organisation, we are pleased to collaborate with SJPP and CGC in aiding the acceleration of economic activity, with a set of guarantee schemes offered to businesses [for them] to continue to innovate and grow further,” he said.
Also present at the signing ceremony on Monday were Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, CGC chairman Datuk Mohammed Hussein and SJPP principal officer Chen Yin Heng.
Tengku Zafrul said the Government will continue to provide provisions for the guaranteed schemes targeted at micro, small and medium enterprise (MSMEs) to help them gain easy access to financing facilities.
“This has enabled all MSMEs, including those with inadequate collateral and no financial track record, to obtain holistic financial support at competitive rates.
“The joint initiative will be continued throughout Budget 2023 in empowering MSMEs to remain resilient and continue to grow,” he said.
Such financing includes the CIMB-CGC Financing Programme, the Low Carbon Transition Facility (LCTF) and the Pemulih Government Guarantee Scheme (PGGS).
The CIMB-CGC Financing Programme is available for the purchase and refinancing of property under CIMB’s SME Banking, where customers can monetise their property for working capital of up to 150% of the value of the property, with a 70% CGC guarantee under the Portfolio Guarantee Mechanism.
LCTF financing can be utilised for the installation of solar power systems, the adoption of recycled or biodegradable materials, improved process efficiency to reduce waste, as well as obtaining sustainability certification.
The LCTF is supported by both CGC and SJPP, with guarantee cover ranging from 30% to 80%.
PGGS is a government guarantee scheme managed by SJPP, which provides up to 80% guarantee cover for new banking financing facilities, or additional working capital of up to RM20 million, with a maximum loan tenure of 10 years.