Standard Chartered, ADB in RM80m pact on financing for SMEs
PETALING JAYA: Standard Chartered Bank Malaysia Bhd and the Asian Development Bank (ADB) have signed an RM80 million supply chain finance (SCF) agreement to provide financing to small and medium-enterprises (SMEs) in Malaysia.
In a statement yesterday, Standard Chartered said this partnership will enable SMEs to gain better access to working capital through this programme at affordable rates.
Worth noting is that this is ADB’s first supply chain financing agreement in the country through a financial institution.
Standard Chartered Malaysia managing director and CEO Mahendra Gursahani said this partnership is a supply chain financing that helps SMEs grow and facilitates the acquisition of raw materials for the production of goods that are sold to their corporate clients.
It is an effective vehicle to support SMEs, which is an underserved market segment. In Malaysia, SMEs account for 97% of all enterprises and 36% of gross domestic product (GDP).
SME bank loans make up an average of 11.6% of GDP and 18.7% of total bank lending in most of developing Asia. This indicates poor ongoing access to bank credit, which is a major barrier to the survival and growth of SMEs.