Malaysia’s First Islamic Portfolio Guarantee (PG) Scheme
KUALA LUMPUR: Standard Chartered Saadiq Bhd (Saadiq) and Credit Guarantee Corp Malaysia Bhd (CGC) have collaborated to launch Malaysia’s first Islamic portfolio guarantee (PG) scheme to provide financing to small and medium enterprises (SMEs) in the country.
The term-financing facility, which offers financing from RM100,000 to RM800,000 over a flexible financing tenure of between 12 and 84 months, is expected to benefit about 400 SMEs within the next one year.
According to Standard Chartered Saadiq & Global Head Islamic Consumer Banking chief executive officer Wasim Saifi, up to RM200mil would be offered under the Islamic PG agreement between Saadiq and CGC.
Saadiq, a wholly owned Islamic banking subsidiary of Standard Chartered Bank Malaysia, is the first Islamic bank to enter into such an agreement with CGC to provide a comprehensive range of Syariah-compliant solutions and grow its business.
“The SME sector is one of the fastest-growing segments in Islamic finance,” Wasim told a press briefing in conjunction with the launch of the PG scheme here yesterday.
“As we know, the SME sector is the key driver of growth and job creation in any country,” he explained, adding that there were already several customers in the pipeline for the new scheme.
Under the agreement, CGC would guarantee 70% of the approved total principal amount undertaken by SMEs and assist to verify the credibility of applicants in consultation with Saadiq.
The scheme is expected to have a shorter turnaround time in terms of approval and disbursement to enable SMEs to gain quicker access to financing.
“We believe that the Islamic-based PG would provide various benefits to the industry, as it provides a viable alternative to those SMEs that prefer syariah-compliant banking to obtain greater access to financing.
“It would certainly contribute to the further growth and development of Islamic financing in Malaysia,” CGC managing director Datuk Wan Azhar Wan Ahmad said.
CGC has to date guaranteed close to RM52bil worth of loans supporting more than 420,000 SMEs.
Separately, Wan Azhar revealed that CGC would, in 2014, step up efforts to promote schemes focusing on bumiputra borrowers, especially those involved in sectors that most financial institutions would be unwilling to enter.
“We would design schemes for specific sectors; our objective is to mentor and guide the bumiputra borrowers to help them succeed in their businesses,” Wan Azhar said,
He added that the aim was also to provide bumiputra businesses access to a lower cost of borrowing.