business

Maybank sees 40% growth in 2016 retail SME loans

March 10, 2016

Maybank is hoping to grow its retail small and medium enterprise loans by 40% to RM14 billion this year. – The Malaysian Insider file pic, March 10, 2016.Malayan Banking Berhad (Maybank) targets to grow its retail small and medium enterprise (RSME) loans by 40% to RM14 billion this year, from RM10 billion in 2015.

Datuk Lim Hong Tat, the group’s head of Community Financial Services, said the RSME segment has been an integral part of Maybank’s retail business, since it was repositioned to further leverage on the group’s distribution franchise in 2011.

“Our RSME business was a newly-created segment, which we identified as having great potential when we started our community financial services (CFS) transformation programme in 2011.

“In line with this, we introduced multi-pronged initiatives, such as expanded touch points for improved access, faster loan processing turnaround time, innovative yet simple product packaging and hassle-free processes,” he said at a media briefing today.

RSMEs refer to businesses with an annual turnover of up to RM25 million, and total group exposure of RM5 million.

Lim said ever since the full roll out of the RSME model in 2013, the segment has recorded a compounded annual growth rate of more than 30% in loans.

RSMEs are able to obtain loans of up to RM1.5 million without the need for collateral, of which RM1 million is guaranteed by Credit Guarantee Corporation Malaysia Bhd. Without the guarantee, loans would be capped at RM500,000.

According to Lim, the group is now focusing on building its RSME portfolio regionally, given the increasing emphasis by the countries on the SME segment, as they seek to tap into opportunities from the formation of the ASEAN Economic Community.

He said given the existing Maybank consumer franchise in Singapore, Indonesia, the Philippines, Cambodia, Laos, and Brunei, the group has progressively introduced its RSME model in these countries, to meet the demand of customers there.

“We started introducing our RSME business model into these markets since 2014 and have been encouraged by the success of our initiatives, which included improvement of processing time by over 50% in key markets, as well as introduction of specific products, with better financing flexibility to meet local customer requirements.

“We intend to build the RSME segment as a pillar of growth across ASEAN and offer our customers, a distinct value proposition, leveraging on “speed” and our “hassle free” access to financing,” he said.

Maybank expects the total RSME loan portfolio (inclusive of Malaysia) to grow by 27% to RM28 billion this year, from RM22.1 billion last year. In comparison, total RSME loans grew by 35.5%, from RM16.3 billion in 2014 to RM22.1 billion last year.

Meanwhile, the bank will also be strengthening its micro-credit financing business in Malaysia.

The micro-credit segment targets businesses having a turnover of up to RM300,000 or less than five full-time employees. Maybank offers loans from as low as RM1,000 to RM50,000 for this segment.

The bank targets to grow loans for the segment by 78% to RM50 million this year, from RM28 million in 2015.

At 3.25pm, shares of Maybank traded up 1.03% at RM8.79, with 7.5 million units traded, giving the company a market capitalisation of RM85.7 billion. – The Edge Markets, March 10, 2016.