SME Bank Maintains Profitability in 2021 Amidst Challenging Landscape

The ability to be quick and agile in adapting and responding to changing environment has enabled SME Bank to grow its total asset to RM11.4 billion and recorded an increase of 8.3% to RM8 billion in gross financing portfolio during the 2021 Financial Year.

SME Bank Chairman, Dato’ Seri Nazir Ariff in a statement said, “Contributed by sound financial discipline, robust risk management approach and strong capital position, the Bank recorded a profit before tax and zakat (PBTZ) of RM55.3 million in 2021 surpassing the target of RM28.4 million.”

Dato’ Seri Nazir added, “In 2021, the Bank approved a total of RM3.5 billion in financing and it benefitted 1,825 SMEs. Out of the total financing approved, 46.4% was for small sized businesses and 35.2% was for medium sized businesses. The remaining balance which made up 8.4% and 10.0% was for micro enterprises and large enterprises, respectively.”

SME Bank Group President/Chief Executive Officer, (Dr.) Aria Putera Ismail said, “Despite facing unprecedented obstacles and suppressed business environment, SME Bank continued to thrive in 2021 and demonstrated its capacity to deploy exceptional resources and human capital to respond to our customers’ immediate needs.  The top three sectors that received financing were the Wholesale and Retail Trade, and Restaurants and Hotels sector at 27.5% while the Construction and Manufacturing sectors were both at 17.0% each.”

Aria added, “Specifically, in 2021, saw the Bank approving more than RM400 million from the Government’s PENJANA stimulus package which includes SME Go Scheme, PEMERKASA Matching Grant and PENJANA Tourism Financing (PTF) to assist SMEs affected by the pandemic. Under the Bank Negara Malaysia’s Targeted Relief & Recovery Facility (TRRF) initiative which was introduced in 2020, the Bank approved RM150 million financing to affected customers in 2021 and to date BNM has approved a total fund of RM450 million due to the strong demand. Other significant efforts include assisting 175 micro and small entrepreneurs under the Lestari Bumi Financing (LBF) amounting RM63.3 million, approved RM87.8 million to seven entrepreneurs under the Jaguh Serantau programme and through MySMELady, a programme aimed at empowering women entrepreneurs, 12 recipients received a total of RM8 million financing.”

“Acknowledging certain industries were badly affected by the Covid-19 pandemic, through the SME Bank Relief Program 2.0 (SRP 2.0) for entrepreneurs involved in Passenger Transports, Retail Services and F&B, SME Bank was able to assist 311 eligible customers with a financing value of RM248 million. In addition to this, the Bank also offered moratorium assistance for up to six months as well as an extension of the payment period up to 12 months effective July 2021 under the SRP PEMULIH initiative. This has benefitted 2,751 customers, involving total outstanding financing valued at RM4.37 billion,” said Aria.

In addition to providing financial assistance, SME Bank embraces the concept of beyond financing in fulfilling its mandate of nurturing and developing the SMEs. Delivering this important service is SME Bank’s fully owned subsidiary, Centre for Entrepreneur Development and Research Sdn. Bhd. or CEDAR. In 2021, CEDAR conducted 140 coaching and training programmes involving a total of 6,937 participants. As for the Bank, its intervention programmes saw 626 companies successfully migrated upwards in 2021. They recorded growth in profit, revenue, increased in number of employees, adoption of digital technology as well as expansion to the export market.  

In line with global efforts on business sustainability, SME Bank has started its sustainability journey by incorporating Environment, Social and Governance agenda (ESG) in its business operations. In 2021, SME Bank established its 3-year Sustainability Roadmap 2021-2023 and successfully issued its maiden Sustainability Sukuk of RM500 million. SME Bank is currently in the process of developing the Sustainable Development Goals (SDG) Framework which will be used as a guideline to achieve its overall sustainability goals. The Bank is targeting to approve ESG-related financing of RM1 billion in 2022.

SME Bank will continue to support the SMEs through a wide range of existing financing programme as well as under the Budget 2022 allocations. The Bank has been entrusted to lead the SME Recapitalization Fund amounting RM600 million in collaboration with TERAJU and Bank Simpanan Nasional. This equity and quasi-equity funding effort is expected to increase the SMEs participation in national development activities on a larger scale. In addition, a total fund of RM100.00 million has also been allocated for young entrepreneurs through the Young Entrepreneur Fund 2.0.  In line with the Government’s initiative to promote automation to reduce dependency on foreign labour, RM200.00 million has been allocated under the Industrialized Building System Promotion Programme 2.0 (IBS 2.0) fund for eligible contractors up to the G7 category, manufacturers and assemblers.

SME Bank’s corporate social responsibility initiatives to empower the Asnafs and B40s to develop their micro businesses also showed positive impact when participants of the Penjana Komuniti@SME Bank and ISHRAF Programmes recorded RM5.15 million in sales revenue in 2021. Both programmes also gained international recognition upon winning the Merit Awards for Best Development Project for ISHRAF and Best Corporate Social Responsibility Project for Penjana Komuniti@SME Bank from the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP).

For more information on the latest updates on SME Bank, follow the Bank’s official website at www.smebank.com.my and social media platforms.