Alliance, CGC form partnership on SMEs
KELANA JAYA: Alliance Bank Malaysia Bhd and Credit Guarantee Corp Bhd (CGC) have formed a partnership to provide easier access to financial assistance for small and medium enterprises (SMEs) on a portfolio guarantee basis, starting with an initial tranche size of RM50 million.
The collaboration is established to address long processing times and slow disbursement of funds, the two major concerns of SMEs, according to CGC managing director Wan Azhar Wan Ahmad.
“We have automated certain processes under which, several bureaucratic requirements were removed allowing for speedier processing and approval of loans,” said Wan Azhar at the portfolio signing ceremony held here yesterday.
A loan range of RM100,000 to RM300,000 will be offered under the arrangement, with CGC providing 70% guarantee cover of the total approved total principal amount undertaken by the SMEs.
Alliance Bank will assist to verify the credibility of the applicants.
CGC has formed a similar partnership with other banks including Standard Chartered Bank Bhd, OCBC Bank (M) Bhd, RHB Bank Bhd and Public Bank Bhd.
Wan Azhar said CGC is looking to form partnerships with more banks in the future but the names could not be disclosed.
Meanwhile, Alliance Bank head of business banking Steve Miller said the initial portfolio amount of RM50 million is expected to reach its target within the first-half of the bank’s financial year beginning April 2013.
In 2012, CGC saw a total of RM1 billion in new loans with about 3,000 customers. This year, they are aiming to double the number of customers.
“With five financial institutions already on board, we are optimistic that there will be keen interest now from other financial institutions on our portfolio guarantee resulting in greater access to financing for the viable and deserving SMEs,” added Wan Azhar.