OCBC Seals Agreement With CGC To Offer Up To RM500 Million In Loans To SMEs

RB Wed Mar 02, 2011 10:29 am

KUALA LUMPUR, March 1 (Bernama) -- OCBC Bank
(Malaysia) Bhd has sealed an agreement with Credit Guarantee Corporation
Malaysia Bhd (CGC) to offer up to RM500 million in loans to small and medium
enterprises (SMEs), on a portfolio guarantee basis, the largest the country has
seen.

CGC is assisting the SMEs without or with inadequate
collateral and track record, to obtain credit facilities from financial
institutions by providing guarantee cover.

The portfolio guarantee is based on a pre-determined set
of criteria and financial institutions will enjoy a fixed guarantee cover
percentage for the amount agreed upon.

"Under the portfolio guarantee scheme, CGC guarantees
70 per cent of the approved total principal amount undertaken by SMEs and also
assist in verifying the credibility of the SME applicants in consultation with
OCBC Bank," said OCBC bank director and chief executive officer, Jeffrey
Chew in a statement on Tuesday.

In addition, the minimum loan quantum under the guarantee
scheme is RM100,000 and the maximum is RM1 million for each tranche per SME
customer at a fixed loan tenor of five years.

As an introductory offer, OCBC Bank is offering customers
a substantial discount on the guarantee fees payable to CGC and is valid for
the first month.

According to CGC's managing director, Datuk Wan Azhar Wan
Ahmad, CGC has been constantly on the lookout for new ways and channels through
which, the speed loans are processed and disbursed will meaningfully address
the key concerns of SMEs.

"Portfolio guarantee has worked very well for CGC as
it has helped to improve its SME outreach and turnaround time tremendously.

"With OCBC Bank on board, we are looking forward to
leveraging on their SME experience and wider network to further enhance and
speed up the SME access to financing," he said.

He highlighted that since 2009 CGC had committed to
provide a total of RM1.5 billion financing on a portfolio guarantee basis.