Credit Guarantee Corp eyes RM400mil for wholesale guarantee


  • Business
  • Friday, 11 Apr 2014

KUALA LUMPUR: Credit Guarantee Corp (M) Bhd (CGC) is targeting RM400mil for its wholesale guarantee portfolio this year following its deal with OCBC Al-Amin Bank Bhd to launch the country’s first small and medium enterprise (SME) wholesale guarantee.

Known as the Wholesale Guarantee-i, the initial tranche of RM250mil, will be provided to OCBC Al-Amin’s existing unsecured SME clients, which exceeds 5,000.

The two partners will share the risk involved in the financing of businesses equally for a guarantee of five years. Previously, the entire risk centred on the financial institution.

Speaking to reporters after the signing ceremony between CGC and OCBC Al-Amin, CGC president and chief executive officer Datuk Wan Azhar Wan Ahmad said CGC was also in talks with a Middle Eastern country to explore opportunities of setting up similar services there.

“We have also received enquiries from other countries,” he added. He also said the collaboration with OCBC Al-Amin showed CGC’s commitment in the advancement of Islamic finance, although the wholesale guarantee concept could be used for conventional banking as well.

As the tie-up with banks provided seasoned loans repayment information of the SME clients, the guarantee fee for the product was lower, he added. “This enables banks to improve their capability to lend,” he said.

He said CGC was in talks with other parties for wholesale guarantee products but the features would vary from one to another.

The tie up is also not limited to Islamic banks.


Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 7
Cxense type: free
User access status: 3

   

What do you think of this article?

It is insightful
Not in my interest

Across The Star Online