Addressing the cause: CGC's financial advisory services are delivered by the Financial Advisory Team to accomplish the aim of increasing the number of SMEs successfully obtaining financing.
CREDIT Guarantee Corporation Malaysia Bhd (CGC) wants to address the lack of access to business financing for Malaysia’s micro, small and medium enterprises (MSMEs).
Firstly, MSMEs can use Malaysia’s first SME free online financing referral platform imSME to understand the financing options available, based on their current business condition.
For those unsuccessful in obtaining financing, they can leverage on the CGC Developmental Programme with its advisory services to improve their chances.
In CGC, the Financial Advisory Team assists imSME applicants who do not get a product match or financing from financial institutions (FIs) or development financial institutions (DFIs).
This includes reviewing these MSMEs, providing comprehensive advice and subsequently recommending alternate financing or suitable capacity-building agencies.
The CGC Developmental Programme takes a holistic approach through financing and market initiatives to help companies acquire relevant knowledge that can help them grow their business to the next level.
In general, MSME applications are usually rejected by FIs as they fail to prove the ability to generate sufficient cash flow for repayment, or are unable to justify the purpose of the financing application with documented proof of the company’s current state and its projected future business plan.
MSMEs are also weak in financial literacy, often even lacking a proper record-keeping system for business documents.
For newly established companies, they tend to be held back by their limited time in operation and in turn, the lack of a business track record or transactions that can help support repayment capability and business sustainability.
Before the CGC Developmental Programme was launched in 2016 and since its July 1972 establishment, the agency has advanced its financial inclusion agenda by providing guarantee cover to MSMEs, especially those with no collateral or track record.
The CGC Developmental Programme is a logical next step for the agency as part of its portfolio, with its Financial Advisory Team dedicated to increasing the success rate of MSMEs in obtaining financing.
The Financial Advisory Team provides advisory services through two ways. They either contact MSMEs that failed to obtain business financing from the imSME referral platform, or attend to MSMEs that contacted the MyKNP platform because of their rejected financing applications.
The team starts off by conducting a comprehensive review and diagnosis to provide one-to-one personalised financial advisory services to MSMEs. This is to improve their eligibility for financing in the future, including:
From its inception until March 31,2021, the CGC Financial Advisory Team has successfully provided advisory to more than 20,000 SMEs and assisted 889 SMEs to secure financing approvals from CGC, FIs or alternate financiers through both the imSME and MyKNP channels.
For MSMEs that have applied through imSME, the Financial Advisory Team will contact those that have failed to obtain financing within two working days.
MSMEs can also reach out to MyKNP by emailing myknp@cgc.com.my or calling 03-7880 0088 to refer their case to the Financial Advisory Team.
