KUALA LUMPUR (Sept 18): Malayan Banking Bhd (Maybank) is targeting an 18% growth in its small and medium enterprise (SME) loans this year, outpacing the 15% loan growth for that segment last year, according to Maybank group chief executive officer (CEO) for community financial services Datuk John Chong.
This follows the launch today of the banking group’s Maybank SME Digital Financing solution, a digital financing solution that approves SME loan applications within 10 minutes.
Chong said the bank is looking to disburse over RM500 million for the next three months via Maybank’s SME digital financing platform.
“Overall, as a business for the SMEs [segment], we are projecting to disburse RM35 billion over the next three years and this digital loan platform will represent about 17% of our total [disbursement],” Chong added during a virtual launching ceremony today.
To a question on whether the banking group is concerned about asset quality, Chong says the group's asset quality for the SME portfolio on a whole at the moment is “very manageable”.
“So that gives us a lot of encouragement. Secondly, as I mentioned earlier, we used the data from what we have done in the past, together with the data that we have on customers on our credit knowledge and technology, with that we will manage the asset quality very well," Chong added.
As at June 30, 2020, Maybank’s ratio of net impaired loans stood at 1.29% from 1.33% on Dec 31, 2019.
Maybank group president and CEO Datuk Abdul Farid Alias noted: “Using our in-house data and credit knowledge while leveraging machine learning capabilities, we are now able to measure the risks of our customers better, and provide financing even to start-ups which have only been in operation for one year.”
He added that it has been a constant challenge for banks to design an approach for SME funding where the risks will be acceptable. However, by marrying technology and finance, Maybank is now able to assess the business viability and extend financing to start-ups which often struggle to secure funding mainly due to lack of credit history or collateral.
Maybank’s SME Digital Financing is “the first in the market to offer an end-to-end digital experience”, according to the banking group in a press release.
“Machine learning enabled, the entire process from application to approval is designed to be completed within 10 minutes, setting a new benchmark for turnaround time for SME financing in the country,” it added.
SMEs can apply for financing on SME Digital Financing via its digital platforms, Maybank2U or Maybank2U Biz platforms, 24 hours a day and seven days a week, without having to visit a branch. Currently, three types of loans are offered via the digital channel, consisting of SME Online Clean Loan/SME Online Clean Financing, SME Online PGX/SME Online PGX–i (70% guaranteed by CGC) and SME Online Micro Financing/SME Online Micro Financing-i.
Maybank said the application process requires minimal information and no documentation for existing customers.
“Existing customers will be informed of the decision of the application as quickly as 10 minutes (provided the customers’ records are in order) and funds can be disbursed within one minute upon acceptance of the offer for eligible customers,” it added.
Maybank noted that new customers, however, will have to undergo a brief on-boarding verification process with no branch visit, prior to approval of application, and decisions will be provided within two working days.
Registered SME businesses with turnover below RM25 million, including non-Maybank customers, are eligible to apply for financing via the SME Digital Financing. Approved applicants are able to obtain financing from as low as RM10,000 to a maximum of RM250,000 with a repayment tenure of up to five years.
Farid said Maybank understands the pivotal role that SMEs play in the country and is on a constant journey to develop new solutions that are supportive of their growth.
“The introduction of Maybank SME Digital Financing allows us to deliver a new experience to SMEs, one that provides a quick, convenient and hassle-free service, via our Maybank2U and Maybank2U Biz platforms. We pilot tested it in August with very encouraging results and positive response among SMEs. Our customers who had applied for financing via the channel during the pilot period were very pleased with the speed and convenience of the process because the quick decisions enable them to plan better for their businesses.”
"The year 2020 is also the final year of our current five-year plan, which includes an aspiration to be a Digital Bank of Choice. We have plans to introduce several other digital products to provide even better experience for our customers, including the SME Digital Financing. We will roll them out progressively during the year," said Farid.