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PETALING JAYA: Malayan Banking Bhd (Maybank) and Credit Guarantee Corporation (CGC) launched SME Clean Loan/Financing Plus, a hybrid loan facility which combines overdraft and term loan to aid small and medium enterprises in their cash flow management.

The bank elaborated that the “first in the market” facility consist of a 30% term loan and 70% overdraft facility without a need for collateral as 70% of the total is guaranteed by CGC.

Both parties have allocated RM1 billion for the facility, which is available in both Islamic and conventional financing schemes.

Maybank’s community financial services CEO Datuk John Chong said the introduction of SME Clean Loan/Financing Plus is timely given that many SMEs are facing liquidity issues after months of disruption to their business.

“The ingenuity of this solution lies in its flexibility which enables SMEs to obtain upfront cash from its term loan while readily available overdraft facility helps with their cash flow management,” he said in a press statement.

Unlike other clean overdraft facilities in the market where the limit will normally reduce a month after disbursement, the CEO pointed out, the facility will only start tapering two years after disbursement, giving ample liquidity to SMEs to meet their short-term cash flow requirement.

According to the bank, the financing amount offered under the scheme ranges from RM250,000 to RM1 million for a minimum tenure of three years up to seven years.

Maybank and CGC are targeting to disburse the first RM300 million within the first year to benefit as many SMEs as possible.

The SME Clean Loan/Financing Plus is available to all Maybank customers as well as those new to the bank.

On the collaboration, CGC’s president and CEO Datuk Mohd Zamree Mohd Ishak said: “This facility supported by CGC’s award winning portfolio guarantee scheme has special features that will provide SMEs with the ability to better manage their liquidity challenges caused by the current adverse economic conditions.

“This initiative is one of our efforts to soften the impact of Covid-19 by providing targeted cash flow support to SMEs so that they can sustain their operations and revive the economy.”

In its commitment to support Malaysia’s SMEs, Maybank has approved RM4.9 billion worth of financing to SMEs with an approval rate of 85% as at May 31, 2020. About 88% of its SME outstanding loans are currently on six-month moratorium from March to September 2020.

Furthermore, the bank has introduced its instant online account opening services for SMEs via its online banking platform, Maybank2U, as part of its continuous effort to leverage digitalisation to provide greater convenience to SMEs.