Term-loan facility ranges from RM1m to RM3m, with a 70% guarantee by CGC, and AmBank to absorb guarantee fee
By NG MIN SHEN / Pic By MUHD AMIN NAHARUL
AMMB Holdings Bhd (AmBank) and Credit Guarantee Corp Malaysia Bhd (CGC) have formed a strategic collaboration with Proton Holdings Bhd to provide financing access of up to RM100 million to Proton dealers for showroom enhancements.
Under the partnership, CGC’s portfolio guarantee will be offered exclusively to eligible Proton dealers for the upgrading of their facilities to 3S (sales, services and spare parts) and 4S (including body and paint) centres.
The term-loan facility ranges from RM1 million to RM3 million, whereby 70% of the borrowings will be guaranteed by CGC and the guarantee fee will be absorbed by AmBank.
AmBank group CEO Datuk Sulaiman Mohd Tahir said the collaboration is in line with the bank’s aim to grow its small and medium enterprises (SMEs) and mid-corporate segments, which are key drivers to its growth.
“We have seen positive growth with our past portfolio guarantee collaborations with CGC through our retail and business banking.
“With today’s association with Proton, we are looking to further complement our commitment in providing the dealers with an exclusive financing and cash management solution.
“Going forward, we will want to work closer with Proton for payment and collection solutions, especially with the dealers,” he told reporters at the document exchange ceremony in Kuala Lumpur recently.
Applications for the term loan opened to dealers from Jan 18, 2019, onwards and will be attended to on a firstcome- first-serve basis within the capped RM100 million allocation.
The portfolio guarantee is targeted to be fully disbursed over the next six months — following which, a second round of term loans may be launched.
“If the response is very good and there are many eligible dealers out there, we may do a second tranche. At the moment it’s the first tranche, to test the response,” Sulaiman said.
Proton Edar Sdn Bhd marketing director Cheng Seng Fook said the group is targeting to upgrade 150 dealer outlets to 3S and 4S centres in 2019, with 73 dealerships already upgraded to date.
According to CGC president and CEO Datuk Mohd Zamree Mohd Ishak, the firm has thus far collaborated with AmBank for eight term-loan schemes totalling RM2.15 billion.
“In total over the last four years, we have done RM2.15 billion. Our initial target was to do RM1 billion, but we doubled it and we hope or plan to do more.
“This portfolio guarantee (for Proton dealers) is not only industry-specific, but also brand-specific,” he said.
Going forward, CGC, which works to assist SMEs to obtain credit facilities from financial institutions by providing guarantee cover on such facilities, will be rolling out more brand-specific schemes.
“For this year, CGC is looking at providing guarantees and financing totalling RM4.6 billion for 2019, reaching almost 10,000 SMEs.
“The plan is to do more for SMEs in 2019 and we’re confident that this will be a good year,” Mohd Zamree said.
Meanwhile, AmBank is expecting to continue seeing strong growth in its SME loan business, which the lender counts as one of its strong segments.
Sulaiman said the group made available close to RM4 billion in new loans approved to SMEs last year, while the actual outstanding portfolio size for SME loans is expected to grow around 30% for the financial year ending March 31, 2019.
As at end-September 2018, AmBank’s retail SME segment recorded gross loan growth of 26% year-on-year (YoY), while the mid-corp and business banking sectors expanded 4% and 9% YoY respectively.