SME Bank Builds Strong Foundation to Support SME Development

SME Bank has built a strong foundation to support the development of SMEs as a result from the successful Two-year Acceleration Program which included the digital transformation initiatives, strategic recovery and effective account management.

SME Bank Chairman, YBhg. Dato’ Seri Nazir Ariff said, “The initiatives undertaken by the management of SME Bank have been fruitful when the Bank recorded a profit before tax and zakat of RM213.9 million and had approved financing amounting RM2.1 billion to 529 SME entrepreneurs for the financial year ended 2019. In addition, SME Bank also recorded gross financing portfolio of RM6.4 billion.”

YBhg. Dato’ Seri Nazir Ariff added, “This success is a testament to SME Bank's commitment in supporting the Government's efforts to create a strong and competitive SME ecosystem. The stability of SME Bank’s operations will also assist the Government in achieving the Entrepreneur and Cooperative Recovery Plan Post COVID-19 which is the Government's efforts in ensuring the sustainability of the SME sector after being hit by this crisis. Support from agencies such as SME Bank will accelerate the process of recovery and rebuilding of the nation’s economy."

Group President/Chief Executive Officer SME Bank, Aria Putera Ismail said, “In response to the various stimulus packages announced by the Government, SME Bank, through PRIHATIN, has successfully approved 940 applications amounting RM503.04 million under the Special Relief Facility (SRF). In addition to the SRF, as at 28 Julai 2020, SME Bank has also processed 15 Agrofood Facility (AF) applications worth RM7.83 million. In addition to the above facilities, the Automation and Digitalisation Facilities (ADF) and All Economic Sectors (AES) Facility are among the funds provided by Bank Negara Malaysia (BNM) to assist SME entrepreneurs affected by the COVID-19 crisis.”

Aria added, “Under PENJANA, SME Bank has been entrusted to manage two important funds in an effort to support the sustainability of SMEs businesses especially in the construction, services and manufacturing sectors post COVID-19 crisis. We have allocated RM1.6 billion for the SME Go Scheme and RM500 million for the SME Technology Transformation Fund (STTF) respectively.”

Aria said, “The impact on the implementation of the digital transformation program has enabled SME Bank to improve its operational efficiency and service quality by reducing redundant processes and utilizing digitization as a financing solution. This has helped the Bank to shorten the application process especially during the COVID-19 crisis in which SME entrepreneurs need financial assistance quickly. ”

In 2019, SME Bank launched the National SME Digital Platform initiative which was recognized by the National Development Council and the National Entrepreneur and SME Development Council. The initiative has also recently won the Outstanding Development Project Awards, for Technology Development category from the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP). ScoreXcess, a portal powered by artificial intelligence (AI) has made it easier for SME entrepreneurs to apply for micro and small financing much faster and more efficiently. Since its launch on 30 September 2019 and until 3 July 2020, ScoreXcess has received a total of 1001 applications and financing worth more than RM18 million has been channeled to the Bank’s strategic partners for processing.

The second application, ODELA which was launched on 3 December 2019 was the first business-to-business (B2B) networking platform that is supported by a Development Financial Institution (DFI). ODELA is targeting to achieve RM9.8 billion worth of transactions in five years and up to date, more than RM440,000 worth of transactions have been recorded.

In addition to financial aid, support in terms of capacity and capability development are also important to ensure that the affected entrepreneurs are able to change their business plan as soon as possible in order to adapt to the current economic situation. SME Bank’s subsidiary, Centre for Entrepreneur Development and Research Sdn. Bhd. (CEDAR) had organized 19 online programs during the MCO period involving more than 10,000 participants. CEDAR has also been actively sharing entrepreneurship tips through its social media platform. Since its inception in 2013, CEDAR has trained over 43,000 participants and in 2019, a total of 2,310 participants had participated in its 126 entrepreneurial coaching sessions.

In the 2019 Budget, SME Bank had allocated a fund amounting RM500 million for the Special Tourism Fund (SFT3) financing. As at 30 May 2020, SME Bank has approved SFT3 financing worth more than RM284.08 million for the tourism sector entrepreneurs. SFT3 financing will continue to be offered until the fund is fully approved.

In terms of entrepreneur capacity building, SME Bank, together with its strategic partner, TERAJU and MATRADE, had organized the beyond financing initiatives such as the Best Exporters Program (BEP) to nurture and develop successful Malaysian SME exporters.

A total of 55 out of 73 companies that participated in BEP had successfully recorded an increase in total export revenue of RM141.4 million in 2019. The program also received recognition as the winner for Outstanding Development Project Awards under the SME Development Category by ADFIAP this year.

As a caring organization, SME Bank also extended its assistance to the under privileged. To help ease the Government’s burden in curbing the spread of COVID-19, SME Bank contributed zakat amounting RM300,000 and RM50,000 in corporate donations to selected Government hospitals, National Disaster Management Agency (NADMA) and the Malaysia Red Crescent Society. In 2019, for the first time, SME Bank partnered with selected strategic organizations from Government hospitals and public universities to distribute RM1.6 million zakat. The contribution was used to cover the cost of medical expenses and education fees for the deserving asnaf.

SME Bank's continuous efforts to assist SME entrepreneurs through various financing and development initiatives have been recognized by the Malaysian Rating Corporation Berhad (MARC) who had assigned AAA rating with a stable outlook in 2019 to SME Bank.

Three of SME Bank initiatives in 2019 also received recognition from ADFIAP during its 42nd Annual Meeting held in Oman from February 20-22, 2019. The three awards are the Merit Award for Corporate Responsibility Project for the SME Bank Y-Biz Challenge and two Special Awards namely Best Sustainability Report and Best Website. In addition, SME Bank also was accorded with the Top Performance Award from Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) and the Silver Award for Occupational Safety and Health Award 2018 from the Malaysian Society for Occupational Safety and Health (MSOSH).