KUALA LUMPUR: SME Bank Bhd expects to see its total financing portfolio grow at seven per cent this year, versus the 12.5 per cent recorded last year.
The decrease in loans growth projection, according to its group managing director Datuk Mohd Radzif Mohd Yunus, isn’t necessarily a bad thing as it is reflection of an improving economy.
“As a development financial institution (DFI) focusing on assisting local small and medium enterprises (SMEs), it is expected for us to step in and assist the unserved and underserve when the commercial banks are not ready to do so,” he said in a recent interview with NST Business.
“Our projection of a seven per cent loan growth for this year is a good thing as it is a reflection of the economy. We feel that when the economy gets better, commercial banks would step in and people in need of financing would then shift to commercial banks instead of coming to us.”
Radzif said the recovery would come on the back of increasing crude oil and palm oil prices.
“There are external challenges of course, especially with the volatility from the West, but we are blessed as we have plenty of natural resources, like palm oil.
“With this, hopefully the corporate sector would improve and the SMEs would benefit from the trickling-down effect,” he said.
As at December last year, the bank had given financing approvals worth RM26 billion, while its actual financing portfolio stood at RM6 billion.
“The top three contributing sectors to our financing business are the service industry at 69 per cent, manufacturing at 15 per cent and construction at 15 per cent.
“We expect the trend to sustain as almost 95 per cent of the SMEs are in these three sectors,” said Radzif.
Radzif’s main objective this year is to strengthen the bank’s customer service capabilities that are very much in line with the government’s aim of making this year a start-up and SME promotion year.
“In line with the emphasis on the SME sector in the most recent budget, we would broaden our outreach to SMEs and intensify efforts to spur the growth of the sector. We are consistently improving our own standards in delivering loan approvals and ensuring that customers get what they need. But this is sometimes challenging because our loan approval process takes longer time than commercial banks,” he said.
“We have also been doing customer satisfaction surveys for the last five years and have seen improvements year-on-year.”
Radzif said the bank’s effort in supporting and nurturing SMEs goes beyond financing, through ongoing customer engagement activities, such as the XCESS 2016, Outreach Programme and Customer Open Day, which provide opportunities for entrepreneurs to interact directly with the bank and explore ways to expand their businesses.
“We have approved RM291 million in financing through XCESS 2016 and an additional RM670 million through the Outreach Programme held last year,” he said.
XCESS 2016 provided an avenue for SME entrepreneurs to get one-to-one consultation on their working capital needs and processing of financing applications.
“I would like to see SMEs capitalising on government incentives and SME Bank’s various products and services. We would like our customers to know that we are eager to continue engaging with them through various channels and activities.”
Founded in 2005, SME Bank strives to provide financial and non-financial needs to SMEs. It concentrates on six sectors of the National Key Economic Area — education, tourism, healthcare, business, oil and gas and wholesale and retail.