SME BANK SEES LOAN GROWTH AT 7PC

Lower pro­jec­tion for this year not a bad thing as it re­flects im­prov­ing econ­omy, says man­ag­ing di­rec­tor

New Straits Times - - Business - LIDIANA ROSLI KUALA LUMPUR lidiana@nst.com.my

SME Bank Bhd ex­pects to see its to­tal fi­nanc­ing port­fo­lio grow at seven per cent this year, ver­sus the 12.5 per cent recorded last year.

The de­crease in loans growth pro­jec­tion, ac­cord­ing to its group man­ag­ing di­rec­tor Datuk Mohd Radzif Mohd Yunus, isn’t nec­es­sar­ily a bad thing as it is re­flec­tion of an im­prov­ing econ­omy.

“As a de­vel­op­ment fi­nan­cial in­sti­tu­tion (DFI) fo­cus­ing on as­sist­ing lo­cal small and medium en­ter­prises (SMEs), it is ex­pected for us to step in and as­sist the un­served and un­der­serve when the com­mer­cial banks are not ready to do so,” he said in a re­cent in­ter­view with NST Busi­ness.

“Our pro­jec­tion of a seven per cent loan growth for this year is a good thing as it is a re­flec­tion of the econ­omy. We feel that when the econ­omy gets bet­ter, com­mer­cial banks would step in and peo­ple in need of fi­nanc­ing would then shift to com­mer­cial banks in­stead of com­ing to us.”

Radzif said the re­cov­ery would come on the back of in­creas­ing crude oil and palm oil prices.

“There are ex­ter­nal chal­lenges of course, es­pe­cially with the volatil­ity from the West, but we are blessed as we have plenty of nat­u­ral re­sources, like palm oil.

“With this, hope­fully the cor­po­rate sec­tor would im­prove and the SMEs would ben­e­fit from the trick­ling-down ef­fect,” he said.

As at De­cem­ber last year, the bank had given fi­nanc­ing ap­provals worth RM26 bil­lion, while its ac­tual fi­nanc­ing port­fo­lio stood at RM6 bil­lion.

“The top three con­tribut­ing sec­tors to our fi­nanc­ing busi­ness are the ser­vice in­dus­try at 69 per cent, man­u­fac­tur­ing at 15 per cent and con­struc­tion at 15 per cent.

“We ex­pect the trend to sus­tain as al­most 95 per cent of the SMEs are in th­ese three sec­tors,” said Radzif.

Radzif’s main ob­jec­tive this year is to strengthen the bank’s cus­tomer ser­vice ca­pa­bil­i­ties that are very much in line with the govern­ment’s aim of mak­ing this year a start-up and SME pro­mo­tion year.

“In line with the em­pha­sis on the SME sec­tor in the most re­cent bud­get, we would broaden our outreach to SMEs and in­ten­sify ef­forts to spur the growth of the sec­tor. We are con­sis­tently im­prov­ing our own stan­dards in de­liv­er­ing loan ap­provals and en­sur­ing that cus­tomers get what they need. But this is some­times chal­leng­ing be­cause our loan ap­proval process takes longer time than com­mer­cial banks,” he said.

“We have also been do­ing cus­tomer sat­is­fac­tion sur­veys for the last five years and have seen im­prove­ments year-on-year.”

Radzif said the bank’s ef­fort in sup­port­ing and nur­tur­ing SMEs goes be­yond fi­nanc­ing, through on­go­ing cus­tomer en­gage­ment ac­tiv­i­ties, such as the XCESS 2016, Outreach Pro­gramme and Cus­tomer Open Day, which pro­vide op­por­tu­ni­ties for en­trepreneurs to in­ter­act di­rectly with the bank and ex­plore ways to ex­pand their busi­nesses.

“We have ap­proved RM291 mil­lion in fi­nanc­ing through XCESS 2016 and an ad­di­tional RM670 mil­lion through the Outreach Pro­gramme held last year,” he said.

XCESS 2016 pro­vided an av­enue for SME en­trepreneurs to get oneto-one con­sul­ta­tion on their work­ing cap­i­tal needs and pro­cess­ing of fi­nanc­ing ap­pli­ca­tions.

“I would like to see SMEs cap­i­tal­is­ing on govern­ment in­cen­tives and SME Bank’s var­i­ous prod­ucts and ser­vices. We would like our cus­tomers to know that we are ea­ger to con­tinue en­gag­ing with them through var­i­ous chan­nels and ac­tiv­i­ties.”

Founded in 2005, SME Bank strives to pro­vide fi­nan­cial and non-fi­nan­cial needs to SMEs. It con­cen­trates on six sec­tors of the Na­tional Key Eco­nomic Area — ed­u­ca­tion, tourism, health­care, busi­ness, oil and gas and whole­sale and re­tail.

PIC BY HAFIZ SOHAIMI

SME Bank group man­ag­ing di­rec­tor Datuk Mohd Radzif Mohd Yunus says the main ob­jec­tive this year is to strengthen the bank’s cus­tomer ser­vice ca­pa­bil­i­ties.

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