Image credit: The Edge Markets
KUALA LUMPUR: Malayan Banking Bhd (Maybank) is targeting 18 per cent loan growth for its small and medium enterprise (SME) segment this year compared with last year's 12 per cent, driven by its new digital platform.
Maybank head of community financial services for Malaysia Datuk Hamirullah Boorhan said as of August 2020, the bank has already touched 15 per cent for the segment.
"Overall, as a business for SME, we are targeting to disburse about RM35 billion for over the next three years, and this digital loans platform (Maybank SME Digital Financing) will represent about 17 per cent of the total disbursement.
"As from January until August this year, our growth for SME has touched 15 per cent from last year within 12 per cent. We are optimistic of achieving the 18 per cent target this year," he told in a virtual press conference after launching the Maybank SME Digital Financing today.
Maybank SME Digital Financing is the first in the market to offer end-to-end digital experience, with full straight-through processing (STP), from application to approval and disbursement.
Hamirullah said the bank is targeting to disburse the first RM500 million of the newly-launched Maybank SME Digital Financing within the first year to benefit as many SMEs as possible.
"From today until the end of the year, we are targeting to disburse more than RM500 million for this new Maybank SME Digital Financing platform.
"As for the next three years, we are looking at disbursing around RM4 billion to RM5 billion from these digital loans," he said.
Meanwhile, Maybank group president and chief executive officer Datuk Abdul Farid Alias said the Maybank SME Digital Financing is the culmination of the bank's efforts to increase inclusivity for SME financing.
Abdul Farid said the launch of this solution is a breakthrough in Maybank's SME financing as it incorporates an enhanced credit tool, which allows the bank to expand its lending relationships.
"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 said.
Abdul Farid said 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 was 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, he said.
"All term financing offered via the Maybank SME Digital Financing are collateral-free, to provide quick financing to ease the immediate cash flow needs for small businesses," he said.
Maybank has also collaborated with Credit Guarantee Corporation (CGC) to provide guarantee coverage for its Online PGX/PGX-i financing, one of the products offered on the digital channel, with guarantee coverage of up to 70 per cent.
This is a first of its kind digital collaboration with CGC, which shares Maybank's focus in growing SMEs.
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.
Abdul Farid said the introduction of Maybank SME Digital Financing allows the bank to deliver a new experience to SMEs, one that provides a quick, convenient and hassle-free service, via Maybank2U and Maybank2U Biz platforms.
"We tested it in August with very encouraging results and positive responses 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," he said.
Abdul Farid said the launch of Maybank SME Digital Financing marks the bank's further expansion in the digital lending space, achieving yet another key milestone in its digital banking journey.
"The year 2020 is also the final year of our current five-year plan, which includes the aspiration to be a Digital Bank of Choice.
"We have plans to introduce several other digital products to provide an even better experience for our customers, including the SME Digital Financing. We will roll them out progressively during the year," he added.
Source: https://www.nst.com.my/business/2020/09/625542/maybank-targets-18pct-loan-growth-sme-segment-year