OCBC Seals Agreement With CGC To Offer Up To RM500 Million In Loans To SMEs
KUALA LUMPUR, March 1 (Bernama) -- OCBC Bank (Malaysia) Bhd has sealed an agreement with Credit Guarantee Corporation Malaysia Bhd (CGC) to offer up to RM500 million in loans to small and medium enterprises (SMEs), on a portfolio guarantee basis, the largest the country has seen.
CGC is assisting the SMEs without or with inadequate collateral and track record, to obtain credit facilities from financial institutions by providing guarantee cover.
The portfolio guarantee is based on a pre-determined set of criteria and financial institutions will enjoy a fixed guarantee cover percentage for the amount agreed upon.
"Under the portfolio guarantee scheme, CGC guarantees 70 per cent of the approved total principal amount undertaken by SMEs and also assist in verifying the credibility of the SME applicants in consultation with OCBC Bank," said OCBC bank director and chief executive officer, Jeffrey Chew in a statement on Tuesday.
In addition, the minimum loan quantum under the guarantee scheme is RM100,000 and the maximum is RM1 million for each tranche per SME customer at a fixed loan tenor of five years.
As an introductory offer, OCBC Bank is offering customers a substantial discount on the guarantee fees payable to CGC and is valid for the first month.
According to CGC's managing director, Datuk Wan Azhar Wan Ahmad, CGC has been constantly on the lookout for new ways and channels through which, the speed loans are processed and disbursed will meaningfully address the key concerns of SMEs.
"Portfolio guarantee has worked very well for CGC as it has helped to improve its SME outreach and turnaround time tremendously.
"With OCBC Bank on board, we are looking forward to leveraging on their SME experience and wider network to further enhance and speed up the SME access to financing," he said.
He highlighted that since 2009 CGC had committed to provide a total of RM1.5 billion financing on a portfolio guarantee basis.
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