Enabling SME growth in digital economy

CIMB Bank’s mid-term growth plan is to boost SME access to working capital and other financial solutions to catalyse their growth, says Lee.

SMALL and medium enterprises (SMEs) are the engines of growth for the Malaysian economy and CIMB Bank Bhd is reiterating its commitment to supporting the sector, in line with the increased spotlight on smaller businesses in recent years.

This comes on the back of the recent announcement by CIMB Bank to disburse at least RM15bil over the next two years to help finance 100,000 SMEs in the country.

SME contribution to the gross domestic product (GDP) reached 37.1% in 2017 and is expected to reach 41% by 2020. As these businesses continue to drive the Malaysian economy, CIMB wants to support SME growth by focusing on helping the underserved micro-enterprises segment, in particular, access loans below RM500,000.

CIMB’s commercial banking business, which includes the SME sector, currently contributes more than 20% to the group’s profit before tax, but the bank is aiming to increase the portion to one-third within five years.

In line with Forward23, the bank’s mid-term growth plan, the bank is refocusing its SME proposition to turbocharge its commercial business and boost SME access to working capital and other financial solutions to catalyse their growth, said CIMB Group commercial banking CEO Victor Lee Meng Teck.

The undertaking to better serve SMEs through technology will be internal as well. CIMB will spend over RM300mil in the next five years to strengthen its digital proposition for SMEs to create an end-to-end digital journey.

CIMB Group will also spend RM75mil to upskill its employees through training and certification programmes, to increase the digitally-skilled among its 36,000 headcount groupwide – from 5% to 15% minimum.

“We will improve our products, services and user experience, in an effort to not only power up SMEs’ growth, but also facilitate their day-to-day operations. We are a bank that has multiple products, unlike a fintech that could be single-purpose, but we need to upgrade ourselves and move fast to serve SMEs in the new economy,” said Lee.

What makes the bank’s take on SME banking different is its commitment to support SMEs not only through financing, but also helping them build up capability.

CIMB wants to make a difference by enabling its SME customers, or potential customers, to become more digitally-ready to tap into opportunities in broader markets locally and overseas.

To achieve this, training and workshops will be conducted and CIMB is aiming to deliver 1,000 events via its distribution strength of 200 branches in Malaysia to benefit SMEs.

Besides Malaysia, CIMB is looking to continue these programmes in the other three key markets – Indonesia, Singapore and Thailand – where the group has a presence in.

Part of these efforts is a collaboration with Star Media Group in the SME Thought Leadership 2019 series, where successful entrepreneurs, experts and specialists will share insights that enable startups and budding business owners to take their enterprise to the next level, said Lee.

The first forum on May 2 under the SME Thought Leadership 2019 series, for instance, will see a strong focus on how leveraging on big data and analytics can help SMEs run their business effectively and mine data for growth opportunities.

Titled Discover New Business Opportunities Through Big Data, this half-day (8am-2pm) forum will be held at Menara Star in Petaling Jaya. Admission is free.

Lee also highlighted the importance of networking opportunities at the event.

“When SMEs come together and they interact, there will be lots of learning and networking opportunities, so we want to enable them to do that.

“In short, apart from gaining first-hand access to new technology, trends, issues, business tips and future developments in various industries, the SME Thought Leadership forum also serves as a valuable networking platform for SMEs,” he said.

Such events enable the bank to forge closer ties with local communities, as well as become trusted advisors for SME solutions related to financing, cash management and trade.

Moreover, Lee is setting up a team to help customers cross borders across the bank’s key markets, which will be the source of intra-Asean trade. This is where the bank’s 800 branches and over 2,000 relationship managers in Asean will come into play to facilitate cross-border financial advisory to give its customers a soft landing into new markets.

CIMB’s Halal Corridor initiative will also help SMEs grow and expand beyond Malaysia into Asean and even further afield by taking advantage of CIMB’s complete suite of end-to-end Islamic financial solutions and regional expertise, its strong Asean footprint (CIMB Group has a presence in all 10 Asean countries), as well as strong global partners.

The SME Thought Leadership 2019 series is organised by Star Media Group and presented by CIMB Bank Bhd.

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