Wednesday, May 8, 2013

CGC expects growth to pick up after slow start

KUALA LUMPUR, May 7 (Bernama) -- Credit Guarantee Corporation Malaysia Bhd (CGC) will pick up the momentum in financing small and medium entrepreneurs (SMEs) in the second phase after distractions in the first phase (January to April 2013) due to the 13th general election.

Source from (Bernama): http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=948078
Published: May 08, 2013

Source from (The Star Online): http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=948078
Published: May 08, 2013

Source from (The Sun Daily): http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=948078
Published: May 08, 2013

He said the January to April period saw many distractions, but the agency considers this as an exceptional year, happening once in five years.

"We're going to pick up momentum (in financing SMEs post-GE13). Every year we see growth except for this year because of the (GE13) distractions, which is understandable. It's no secret that the election and the period of campaigning has had an effect on our business activity," he told a press conference after the Top SME Supporter Awards ceremony here yesterday.

Wan Azhar said CGC is expecting to double its guarantee cover on new loans this year to RM2 billion from RM1.1 billion in 2012.

He added that the importance of SMEs as a contributor to economic growth is clear and nothing will be done contrary to that agenda.

"SME growth will continue to be a prominent feature. I don't see any cutback in terms of SME allocation."

He also said CGC, over and above availing access and providing guarantee, is moving towards its second-level agenda to turn more borrowers into bankable borrowers.

"These borrowers may not require CGC guarantee but we want to make them more bankable. It will allow those (with good credit standing, more bankability) to be able to negotiate with banks on better rates, better facilities on reduced cost."

He said there was significant growth in terms of lending to SMEs last year and CGC is seeing less and less of dependency on government support to get financing.

"With better credit standing by SMEs and better bankability, SMEs require less amount of guarantee cover. We're looking at 65% to 75% of guarantee cover compared with 80% in the previous year," said Wan Azhar.

As at April 2013, CGC has approved 71 applications under the Green Technology Financing Scheme valued at RM900 million.

Wan Azhar said there has been a significant increase in the quality of loans based on its provision for claims on loans guaranteed in 2012, due to improved management of its loan quality which included several proactive and preemptive measures it has undertaken to address potentially delinquent loans, as well as assistance on loan restructuring and rescheduling of repayments extended to distressed borrowers.

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