This article first appeared in The Edge Financial Daily on June 12, 2018
KUALA LUMPUR: RHB Bank Bhd aims to raise its financing for small and medium enterprises (SMEs) from 16% of the bank’s domestic financing to 20% by 2022.
RHB Banking Group head of group business and transaction banking Jeffrey Ng Eow Oo said this will be boosted by its launch of the RHB SME Financing portal, which enables customers to apply for SME term loans online in 10 minutes with minimal data input, and obtain financing within five working days.
“SME is a key area of growth for our banking group, and in line with that, we want to ensure that we continue to innovate our products and services to remain at the forefront of the industry,” he told reporters at the launch of the new product yesterday.
Through the online platform, RHB targets to approve RM100 million in SME loans over the course of one year. Yesterday, RHB launched its pilot run focusing on SMEs in the Klang Valley. It will introduce the platform nationwide by the third quarter of this year.
The RHB SME Financing offers SME term loans with a minimum tenure of six months up to 24 months, for disbursements of between RM50,000 and RM300,000. It is eligible for businesses with an annual turnover of less than RM35 million.
The online loan application only requires two documents to be uploaded, and it provides a loan simulator to help customers calculate their affordability. Application tracking can also be done via the platform.
“One thing that SMEs are looking for is simplicity. They find that banks are a bit complicated; they are unsure of how to do the submission and they don’t have clarity as to where exactly are their applications. So with this platform, we are trying to address that gap. We reduce document requirements and we also tell them exactly at which point is their application process,” Ng added.
Ng said Malaysia has about 900,000 SMEs, and close to 20% of that have some form of relationship with RHB, giving the bank an SME loan market share of 9% as of 2017.
“The SME market itself has a lot of depth and is still underpenetrated so there is still room to grow for the banking industry. More importantly, we would like to deepen the wallet share and relationship with our existing SME clients,” he said.