Reasons for rejected SME loans to be disclosed

ETALING JAYA: The Association of Banks in Malaysia (ABM) has announced that small and medium enterprises (SMEs) will now be able to know the reasons for their loan applications being rejected by participating commercial banks. 

Source from (The Star Online): http://www.thestar.com.my/Business/Business-News/2013/07/17/Reasons-for-rejected-SME-loans-to-be-disclosed.aspx
Published: July 17, 2013

ABM executive director Chuah Mei Lin said in a statement on Monday that to accommodate SMEs’ request, participating banks would now adopt a template consisting of a checklist which clearly identified the areas in which the SME had failed to comply.

“Hopefully, unsuccessful applicants would appreciate what is lacking in their application and work towards being better prepared in their next loan application,” said Chuah.

A segment of “Partner 2” – an ABM initiative aimed at enhancing banking efficiency and customer service for SMEs – this forms part of the member banks’ initiative to continue streamlining and enhancing the processes and procedures involved in SME loan applications.

The checklist will cover broad reasons such as weaknesses of the business plan, collateral adequacy and credit history, among others.

The statement added that the banks would also make reasonable attempts at meeting with or delivering the letter to the applicant, as it involved sensitive information.

“We would strongly urge unsuccessful applicants to meet with the banks to discuss the matter in greater detail, face to face,” added Chuah.

SMEs may download the checklist from ABM’s website at www.abm.org.my.

Under Partner 2 also, a timeline has been set for SME loan applications endorsed by the Credit Guarantee Corp Malaysia Bhd to not go beyond a maximum of 52 days, thereby allowing SMEs to plan ahead.