Exim Bank expects 40% of RM1b loan applications to come from SMEs

KUALA LUMPUR, Nov 1 (Bernama) -- Export-Import Bank of Malaysia Bhd (Exim Bank) expects 40% of its targeted loan applications worth RM1 billion for this year to come from the small medium entrepreneurs (SMEs), who usually made up 80% of its total borrowers.

Its managing director/chief executive officer, Adissadikin Ali, said the same structure would prevail for next year, with the SMEs to make up 80% of the total borrowers.

"The value of their loan applications will be about 40% of the expected value of RM1.8 billion for loan applications for next year.

"The majority of the SMEs are involved in the manufacturing sector in Malaysia which export to the traditional markets," he told Bernama at the Star Outstanding Business Awards (Soba) 2011 here Tuesday.

Exim Bank is the presenter or main sponsor of SOBA for this year.

Earlier, in his speech, Adissadikin said, over the last five years, Exim Bank had provided RM3 billion in financing to companies, of which 80% of them were small and medium enterprises.

He said due to limitations of the Malaysian market in terms of consumption volume, they should look for opportunities overseas to expand their reach.

"However, they should understand the market risk and have the right risk management tools before venturing overseas," he said.

Adissadikin, however, said knowledge on trade credit insurance was still lacking among local exporters.

"For example, when exporting, one of the biggest risks is non-payment for their goods. This risk is high especially in the current global economic uncertainty.

"Therefore, local exporters can protect their businesses against such risk by taking up trade credit insurance.

"Whatever your scale of business, Exim Bank will support you from home ground to be global front by providing complete banking and insurance facilities specially catering to your needs," he said.

Adissadikin said small and medium enterprises made up over 80% of business establishments in Malaysia and contributed about 19% to the exports of Malaysia.

"Therefore, they are important market players that form the backbone of the nation's economy.

"As the country progresses closer to achieving the desired developed nation status, the New Economic Model places greater emphasis on the private sector and more so in small and medium enterprises, to be at the forefront of change and development as the crucial drivers of economic growth," he said.

Adissadikin said Soba's key objectives, which were to recognise the contributions of outstanding businesses to the nation's communities and overall economy, to encourage local small and medium enterprises to develop their businesses, and to motivate home-grown businesses to aim for excellence, were in line with the nation's economic aspirations.

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