Offering support: The bank has taken measures to reach out to its customers during these challenging times.
WITH the end of the automatic financing moratorium in September, SME Bank has taken various measures to extend assistance to small businesses even as many try to recover from the economic shutdown during the movement control order.
Accordingly, the bank rolled out its SME Relief Program (SRP) to ensure that SMEs are able to manage their cash flow and sustain their business in this period of crisis.
SME Bank head of asset quality Abd Karim Ahmad (pic below) says the SRP was an enhancement of its banking task force initiated to assist SMEs.
“Each customer requires different needs for their business and it largely depends on the business stage, economic condition and industry sector. Taking all these into consideration, SME Bank has introduced the SRP to further assist our customers after the automatic moratorium period ended, ” he says.
Two types of assistance are offered under the SRP, namely, “Indulgence”, whereby the payment for both profit and principal are deferred for a period to be determined, and “Profit Servicing Period”, where only the payment of profit is made and the payment for principal is deferred for a period to be determined.
The SRP is valid for existing SME Bank customers who were entitled for the
Bank Negara six-months automatic moratorium and whose businesses are still in operation.
Karim notes that 2,390 customers (77%) with financing value amounting to more than RM3.5bil have accepted the SRP to-date. Meanwhile, 66% of its customers have accepted the moratorium extension package up to 12 months and 15% accepted the six-month profit servicing package.
“The bank has taken every measure to ensure that we reach out to all of our customers. Among the steps taken include issuing a notification letter, organising the SRP Open Day at our branches nationwide and calling our customers to ensure they understand the options that they have and assist them to select the package that suits their current business needs and cash flow conditions, ” he says.
The bank also took other steps to assist 230 tenants at its Entrepreneur Premises Complex located at 26 locations nationwide. This included rental exemptions from April to September and a 50% discount on rental payments from October till March 2021 which provide total operational cost savings of RM3.45mil.
SME Bank also organised free coaching sessions called SME Bank Business Strategic Series to equip its tenants with the right knowledge, skills and attitude in managing their operations more effectively given the changing economic landscape. The topics covered include account and financial management, business planning, digital marketing and leadership.
“This is part of SME Bank’s beyond financing initiatives in providing wholesome assistance to our customers to ensure greater success rate of their business recovery and to be mentally prepared for technology challenges, ” shares group president and chief executive officer Aria Putera Ismail. 9pic below)
Nonetheless, access to financing remains key for companies to rebuild their capacity and adjust their operations during this time.
But small businesses often lack the collateral to secure financing. Many also have inconsistent cash flow and unstable revenue, making them a high-risk group. Often, Aria adds, many SMEs also face challenges in preparing a promising business plan which can lead to sustainability issues in operating their business in the current situation.
Aria says the bank has also carried out various entrepreneur development initiatives to ensure that SMEs continue to be supported during these difficult times.
“SME Bank has been improving our internal processes even before the Covid-19 pandemic by removing redundancy
to ensure financing can be processed and disbursed in a timely manner. This has been evidenced in the Covid-19 Special Relief Facility (SRF) which the bank has approved 940 applications worth RM503mil.
“A series of active discussions between financial institutions (FI) and the authority have also enabled us to provide financial assistance to our customers in a timely manner. This includes coming up with simplified standard operating procedures on financing processing, requirements prior to disbursement, guarantee and potential consent from other FI prior to disbursement, ” he says.
The bank’s digital transformation journey that started in 2019 has also enabled it to better support and develop SMEs. It has introduced online platforms such as ScoreXcess, which helps entrepreneurs to apply micro financing in a more efficient way, and ODELA, a business-to-business e-commerce platform for entrepreneurs to make transactions, facilitate exchange, foster innovation and partnership across a vast ecosystem.
The bank also introduced the Book-Your-Banker system which makes it easy for entrepreneurs to secure an appointment with the bank’s officer at the branch of their choice and at a time that is convenient for them.
“It is also important for us to keep communicating effectively with our customers to ensure they are aware of what we have to offer and what they should do to survive in the current challenging environment, ’ says Aria.
