PETALING JAYA: Credit Guarantee Corporation (CGC) Malaysia Bhd hopes the government will introduce a mechanism in the upcoming 2012 Budget to subsidise the cost of Small and Medium Enterprises (SMEs) getting a credit rating.
Managing Director Datuk Wan Azhar Wan Ahmad said the government had made great strides in enhancing the competitiveness and credibility of SMEs.
"However, many SMEs are unaware of or ignorant of credit ratings due to the cost and an inefficient procedure," he said after a signing ceremony between CGC and RHB Bank Bhd here today.
Wan Azhar said the core issue must be addressed, which is the credit standing of SMEs in getting loans.
"When the SMEs do not get a loan, they tend to blame the banking institutions.
"But the actual problem is that, banks are afraid of taking a higher risk by providing loans for SMEs, without proper credit ratings," he added.
Meanwhile Credit Guarantee Corporation Bhd (CGC) and RHB Bank Bhd have formalised a strategic tie-up to further enhance the small and medium enterprises (SMEs) access to financing through it's new scheme, the Enhancer Direct.
The Enhancer Direct is a credit guarantee scheme that is designed to assist viable SMEs that are unable to secure financing due to insufficient collateral and track record, to avail of a range of banking products and services directly through CGC's branches nationwide.
CGC Managing Director, Datuk Wan Azhar Wan Ahmad said with a RM200 million portfolio, the new scheme is expected to benefit about 800-1000 SMEs across all economic sectors in Malaysia.
"The development of a healthy and resilient (SME) community requires sound financial infrastructure that offers a wide spectrum of innovative products and services," he said at the signing ceremony between CGC and RHB Bank, here today.
He added these products must exemplify reliability, flexibility and competitiveness, which are the qualities that SMEs consider as they explore their financing options to further their business interest.
"Given today's fast-paced economy, having fast access to financing is an important consideration for entrepreneurs, who have to move quickly to seize available opportunities and remain competitive," he said.
As the country's leading SME credit enhancer, Wan Azhar said CGC's priority is to provide SMEs with products that promise a quick turnaround time and disbursement of funds.
"Despite the challenges, we have provided guarantee valued at RM50 billion to over 400,000 SMEs in the last 39 years.
"With today's increasing demand for SME financing, there is a need to intensify efforts to develop new and innovative products that are tailored to the specific needs of SMEs.
"Towards this, we have forged strategic alliances with various financial institutions to drive product development, and indirectly leverage on their network to improve outreach," he added. - BERNAMA
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