KUALA LUMPUR: Credit Guarantee Corp Malaysia Bhd (CGC) hopes to guarantee RM200mil worth of loans by year-end under the Enhancer, its newly launched credit guarantee scheme, said chief executive officer Datuk Wan Azhar Wan Ahmad.
He said Enhancer was aimed at helping small and medium enterprises (SMEs) strengthen their credit standing and business viability by adding more value to their loan applications.
“We expect to guarantee loans worth RM1bil next year under the scheme,” he told reporters after the scheme's launch yesterday by Bank Negara deputy governor Datuk Zamani Abd Ghani.
Under the Enhancer, the guarantee fee charged to the borrower would be calculated according to the risk profile of the borrower. Hence, a borrower with a low risk profile would pay a low guarantee fee as opposed to a high-risk borrower.
“The risk-adjusted guarantee fee pricing structure of the Enhancer is an initiative developed by CGC to enable a broader segment of the SME community to have greater access to financing,” Wan Azhar said.
“It may also serve as an incentive for SMEs to enhance their risk profile to benefit from lower guarantee fees,” he said, adding that the scheme would save borrowers about 2.5% of borrowing cost.
The new credit guarantee allows SMEs to borrow up to RM10mil with guarantee coverage of up to 90%.
“We are confident that there will be greater participation by the financial institutions as it offers attractive features that benefit both the borrowers and banks.
“We also hope to attract the locally incorporated foreign banks to participate in the Enhancer scheme in future,” said Wan Azhar.
He added that CGC was in the midst of expanding strategic alliances with Islamic banks to widen its SME market reach.
As of last month, CGC has guaranteed over 363,055 loans valued at RM33.25bil.
Last year, the company guaranteed 8,600 loans valued at RM3.3bil.
“We aim to maintain the momentum on loan approvals this year and the Enhancer will be the major contributor,” Wan Azhar said.
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