KUALA LUMPUR (July 3): OCBC Malaysia and the Credit Guarantee Corp Malaysia Bhd (CGC) are extending their partnership to bring a fresh RM250 million in unsecured financing to small and medium enterprises (SMEs) over the next 12 months, as part of their five-year-old pioneering Wholesale Guarantee (WG) scheme. 

In a joint statement today, the companies said the new allocation will bring total disbursed under the scheme by the middle of next year to RM1.64 billion.

OCBC Malaysia — comprising OCBC Bank (Malaysia) Bhd (OCBC Bank) and its wholly-owned unit OCBC Al-Amin Bank Bhd (OCBC Al-Amin) — had previously disbursed RM1.39 billion in unsecured financing under the scheme with CGC, to industries ranging from retail and wholesale to manufacturing, with the first tranche made available back in April 2014. 

“Of the fresh RM250 million tranche, RM200 million will be from OCBC Bank and RM50 million from OCBC Al-Amin, to be disbursed to 1,000 SME accounts,” the statement read. 

CGC president and CEO Datuk Mohd Zamree Mohd Ishak said the WG scheme provides capital relief to OCBC Bank and OCBC Al-Amin in accordance with Basel II, while providing additional security on their local SME exposure. This in turn will enable OCBC and OCBC Al-Amin to reach out to more SMEs.

OCBC Bank's chief executive officer Datuk Ong Eng Bin meanwhile said that the bank is keen on developing new tranches of WG, in line with the increasing call from SMEs for unsecured financing options to fulfil their short- to medium-term business financing needs.

“As a bank that is steeped in the SME business landscape, we recognise unsecured financing as a necessity and are pleased to once again make available, with CGC, this facility to businesses with established track records that can leverage on their sound financial statements.

"The facility is best suited for capital improvements, capital investments such as machinery and raw materials, and to support business growth where additional working capital is required," he said. 

Ong also said that the WG is designed to remove the cumbersome requirements for term financing such as collateral and a relatively rigorous approval process, so that worthy businesses have better access to short- to medium term financing. 

"We would like to continue playing an active part in the government’s plan for SMEs, as a significant contributor to the country’s economic growth," he added.