COLLATERAL would not be Malayan Banking Bhd's (Maybank) principal criteria for approving loan applications by small- and medium-sized industries (SMIs) as greater emphasis would be placed on business viability, realistic business plans, business environment and competition.
Executive vice-president and head of enterprise financial services group Zulkiflee Abbas Abdul Hamid said the bank's core business was lending and it welcomed any opportunity to do so. He added, however, that it was also the bank's responsibility to ensure good lending, to be prudent and package its loans properly.
Zulkiflee said there should be more confidence between banker and borrower in order to create a win-win situation and urged SMI borrowers to be more open with their banks.
If borrowers have any problems or difficulties in making payments, they should see their bankers to help them repackage their loans according to their needs, he told Starbiz .
Zulkiflee said Maybank had an approval rate of about 80% to 85% of the SMI loan applications submitted. Our benchmark for loans approval is 30 working days from the day the application is received provided all the necessary documents required by the bank to make a credit decision have been furnished, he said.
The turnaround time was reasonable since the bank received huge numbers of loan applications as 51% of its SMI loans were below RM100,000.
Zulkiflee said one of the main challenges to fast loan approvals was the difficulty for SMIs to provide financial statements. About 70% of the applications we receive are without sufficient financial documents, especially statement of accounts, he said.
He stressed however, that such loans would not be rejected straight away as the bank would try to find ways to assist such applicants.
Maybank had been focusing on the SMI sector since 1992 and has established a dedicated division called the commercial banking division with a clear responsibility to service the sector.
In the past 10 years, our SMI business has grown by leaps and bounds, Zulkiflee said, adding that the bank's SMI business made up 23% of the bank's total loans as at December 2002 compared with 18% previously.
Based on the growth trend for the last 10 years, he said the rate could increase to about 25% to 26% in the next five years. However, he stressed that competition would be very stiff as the SMI business would be the focus of other banks as well.
To show the bank's dedication to its SMI business, Maybank has set up 28 dedicated Business Centres (BCs) especially to reach out to and service SMIs.
The BCs are responsible for the commercial business of the bank concentrating mainly on the SMI business. We will be rolling out five more BCs by June, three in Johor and two in Kuantan and Mentakab in Pahang, he said.
Besides having BCs in Kota Kinabalu, Kuching and Miri, the bank also had plans to set up a BC in Sibu. The BCs have account managers and senior account managers to market the bank's products and foster a good relationship with its SMI clients. To complement the BCs, 15 trade finance centres (TFCs) catering to the corporate and SMI business were also set up throughout the country.
Zulkiflee said SMIs especially those in the export, import, trading and construction sectors would need trade financing products and the TFCs' role would be to capitalise on this. Our TFCs also provide advisory services to SMIs needing that kind of support, he added.
Maybank also has a bumiputra development department at its head office to look into the needs of its bumiputra SMIs.