Delivering the Mandate and Embracing Digitalisation are Key Contributors to Successful Performance in 2020 for SME Bank
Delivering the mandate and embracing digitalisation that started three years ago had contributed to SME Bank recording a credible profit before tax (PBT) of RM134.8 million despite the Bank facing extraordinary headwinds during the 2020 financial year. In 2019, SME Bank recorded a PBT of RM213.9 million.
SME Bank’s Chairman, Dato’ Seri Nazir Ariff said, “SME Bank started the year 2020 on a positive momentum as the Bank advanced our transformation into a digital and customer-centric Development Finance Institution (DFI). Despite the challenges, SME Bank successfully delivered our financial targets, having approved RM2.8 billion financing to 2,030 SMEs during the year. Out of the total financing approved, 50.4% were for small category SMEs and 36.6% were for medium sized entrepreneurs. The top three sectors that received the approval were Wholesale & Retail Trade and Restaurants & Hotels at 26.7%, Construction at 17.3%, and Manufacturing at 16.8%.”
“The National SME Digital Platform launched in 2019 saw SME Bank launching the ScoreXcess and ODELA digital applications enabling the Bank addressing concerns and provide relief to our customers as they ride the waves of challenges in 2020. As at 31 December 2020, ODELA, a B2B digital platform has 848 products listed on its platform and it recorded a transaction value of more than RM4.67 million. The Bank’s ScoreXcess which facilitates micro financing applications under one seamless platform saw a total of 1,010 SMEs submitting their applications valued at RM19.87 million.” Dato’ Seri Nazir Ariff added.
Group President/Chief Executive Officer SME Bank, Aria Putera Ismail said, “As a DFI entrusted to grow the nation’s SME sector, it is important for us to ensure the survivability and sustainability of the SMEs. Thus, SME Bank was proactive and had swiftly offered its customers relief measures to tide them through unprecedented financial challenges. Apart from the automatic moratorium assistance announced by Bank Negara Malaysia, SME Bank was the earliest in introducing targeted moratorium extension under SME Relief Programme (SRP) to benefit 3,084 eligible SME Bank customers with total financing value of RM4.1 billion. Subsequent to that, SME Bank had launched SRP 2.0 in March 2021 whereby the targeted financing relief has been extended until September 2021 focusing on critical and most impacted sectors. Going beyond September and true to our mandate of nurturing and developing the SMEs, we have taken a proactive stance of engaging the SMEs to formulate continuous assistance as we ride the expected recovery phase post COVID-19.”
“Additional assistance in the form of deferment and discounts were also given to the tenants of SME Bank's Entrepreneur Premises Complex (EPC). A total of 251 SMEs at 373 EPC lots enjoyed a six-month rental waiver from April 2020 until September 2020 and a further 50% discount on rentals from October 2020 to December 2020. This discount was extended until March 2021. Over the period of April 2020 to March 2021, the waiver and discounts we gave out to all tenants amounted to RM6.1 million. These tenants were also given a free online coaching program namely SME Bank Business Strategic Series (SBSS) by our subsidiary, Centre for Entrepreneur Development and Research Sdn. Bhd. (CEDAR), to equip them with the right knowledge, skills and attitude in managing their operations more effectively especially in these new norms due to the changing economic landscape,” Aria stated.
Aria also said, “The Bank had also offered various relief assistance under the Government’s stimulus packages namely the Pakej Rangsangan Ekonomi Prihatin Rakyat (PRIHATIN), Pelan Jana Semula Ekonomi Negara (PENJANA), and Program Strategik Memperkasa Rakyat dan Ekonomi (PEMERKASA) as well as the Government’s economic assistance administered by Bank Negara Malaysia (BNM). Under the PRIHATIN stimulus package, SME Bank had approved financing amounting to RM4.69 billion and another RM305.5 million under PENJANA. As for the 2021’s PEMERKASA initiative, the Bank had approved a total of RM200 million. In addition, SME Bank was also involved in BNM’s Targeted Relief and Recovery Facility (TRRF) and High-Tech Facility – National Investment Aspirations (HTF-NIA) initiatives.”
Besides focusing on supporting the SMEs to stay afloat, SME Bank also continues to play its role in delivering the Government’s aspiration through the 2020 Budget allocation. The Bank allocated a fund of RM200 million for the MySMELady, a financing facility designed to empower women entrepreneurs in developing their businesses. MySMELady enables them to apply for financing on assets acquisition or working capital, with financing up to RM3.0 million. As at 31 December 2020, nine entrepreneurs had received financing approvals worth RM7.9 million.
In addition, SME Bank strives to create regional champion amongst the Bumiputera SMEs through the Jaguh Serantau financing scheme with an allocated fund of RM300 million for two years, from 2020 to 2021. The Bank had approved financing totaling RM23.5 million as at 31 December 2020 under this scheme.
On its developmental role, Aria said, “CEDAR continues to provide unique and effective entrepreneur development and coaching programmes, albeit virtually, to various stage of SMEs throughout the year. Among others, the programmes enabled the entrepreneurs to reskill, upskill and at the same time embrace automation and digitalization. Through these coaching programmes, we are emphasizing on the markets creating new demands and sectors that offer better opportunities to the entrepreneurs. There is a wealth of information available to those savvy enough to take advantage of it. In 2020, CEDAR had held 1,251 coaching and training programmes involving 13,674 entrepreneurs.”
SME Bank’s commitment in assisting SMEs to grow and remain competitive have been recognized internationally by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) when it became the Winner for SME Development Award for the Best Exporters Programme and Winner for the Technology Development Award for the National SME Digital Platform during the 43rd ADFIAP’s General Meeting which was held online from 28-29 October 2020. The Bank also received the Special Awards for Sustainable Energy Financing for DFI category at the 2020 National Energy Awards (NEA) organized by the Ministry of Energy and Natural Resources on SME Bank’s support in facilitating the SMEs into the green technology sector through the Green Technology Financing Scheme as well as other financing assistance.
