This article first appeared in The Edge Financial Daily on July 6, 2018

KUALA LUMPUR: Malayan Banking Bhd (Maybank) is partnering Credit Guarantee Corp Malaysia Bhd (CGC) to provide up to RM2 billion financing to small- and medium-sized enterprises (SMEs) via the latter’s portfolio guarantee (PG) scheme.

In a joint statement yesterday, Maybank and CGC said this is the largest ever amount under the CGC PG scheme to support local SMEs in growing their businesses further.

Under the scheme, SMEs can apply for either Islamic or conventional financing facilities from Maybank, from a minimum RM50,000 up to a maximum RM1.5 million and for a fixed tenure of up to seven years. CGC will guarantee 70% of the principal financing amount.

The strategic partnership agreement was signed by Maybank head of SME banking Adnan Sharif and CGC chief business officer Leong Weng Choong, witnessed by Maybank head of community financial services Malaysia Datuk Hamirullah Boorhan and CGC president and chief executive officer Datuk Mohd Zamree Mohd Ishak.

Hamirullah said the RM2 billion allocation is on top of the RM1.26 billion approved by Maybank in 2014, followed by RM1.1 billion in 2015 and RM1.5 billion in 2016, driven by the “strong” demand from the SME industry.

“Our decision to extend Maybank’s collaboration with CGC for up to RM2 billion is a reflection of our commitment to support the growth of the SME sector in Malaysia, which is an integral contributor to the Malaysian economy,” he said.

“As at end-2017, Maybank became the largest PG partner in the SME market with a total disbursement of close to RM3.78 billion and benefiting more than 8,000 customers nationwide. Currently, in the first quarter of 2018, I am happy to say that we have surpassed the RM4 billion PG disbursement mark and we are confident that the numbers will increase,” he said.

CGC’s Zamree said the partnership strives to increase access to financing and provide more customised financing products and services that meet SMEs’ needs.