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SME Credit Bureau To Rate SMEs For Easier Financing Access
KUALA LUMPUR, April 16 (Bernama) -- The SME Credit Bureau, formed by the Corporate Guarantee Corporation (CGC), will undertake ratings of small and medium enterprises (SMEs) to help accelerate the sector's growth.Its chairman Datuk Wan Azhar Wan Ahmad said, the ratings, to be created based on local data for all SMEs in Malaysia, would address the perception of this sector being high risk borrowers.
"The bureau would be able to promote reliable credit information to improve the credit worthiness of SMEs by providing a balanced flow of information," he told reporters here after the launch of the SME Credit Bureau today by Bank Negara Malaysia governor, Tan Sri Zeti Akhtar Aziz.
He said the bureau in providing financial institutions and other lenders with easy access to timely, accurate and reliable credit information on SMEs, would facilitate faster credit evaluations while speeding up financing activities.
However, Wan Azhar said the credit ratings issued would not provide any recommendation to either extend or deny credit to SMEs, but instead offer value-added propositions. Likewise, he said the bureau's credit ratings report could also help the SMEs understand their own financial status better and the weaknesses that need to be addressed to improve business operations.
"The SMEs can also use their positive credit history as 'collateral' to access loans at better rates and seek more competitive terms from different lending institutions," he explained.
Moving forward, he said the bureau hoped to include information not only from traditional lenders such as banks, but also from other credit providers such as suppliers and utility companies.
"We believe such non-traditional sources can provide invaluable information to help the bureau enhance its database," he added. In conjunction with the launch, CGC also signed a memorandum of understanding (MoU)with Dun & Bradstreet Malaysia Sdn Bhd and ABM-MCD Holdings Sdn Bhd to undertake the SME Credit Bureau (M) Sdn Bhd as a joint-venture.
Earlier at the event, Zeti encouraged SMEs to maintain and compile the required information to enhance potential access to credit and added that they would greatly benefit from the services of the bureau.
She noted that the SME contribution to Malaysia's economic growth in the manufacturing sector increased to 8.4 percent in 2005 from six percent in 2001. "Consistent with the importance of the SME segment in the total loan portfolio, financial institutions should also regularly interface with SME associations for financial services rendered to be more customised, to meet specific requirements of the sector.
"In this current challenging period of slower growth, financial institutions need to also understand and address early, the problems faced by SMEs," she said. According to Zeti, this may involve adopting greater flexibility in structuring SME financing facilities, including the restructuring of programmes and providing the supporting financial advisory services. -- BERNAMA
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