By NUR HAZIQAH A MALEK / Pic By ISMAIL CHE RUS
Banking and financial institutions should focus in providing adequate funding for start-up businesses in the country, said Deputy Finance Minister Datuk Amiruddin Hamzah.
He said start-ups should not be ignored due to its potential contribution in the country’s GDP and enhancing the role played by the small and medium enterprises (SMEs) in Malaysia’s economic growth.
Amiruddin said a major hindrance in the growth of Malaysian start-ups is the lack of funding facilities.
“There are pockets of SMEs, particularly start-ups, those who are in the new and highrisk segments, that continue to face challenges in obtaining financing,” he said at a guarantee agreement signing ceremony between Credit Guarantee Corp Malaysia Bhd (CGC) and Standard Chartered Bank Malaysia Bhd (StanChart Malaysia) yesterday.
Amiruddin stressed that businesses will be deprived of growth if access to financial products and services is limited.
“We, as a country, are then deprived of the benefits and potentials of start-ups to the economy,” he said.
SMEs’ current contribution to the GDP stands at 37% against the target of 42% expected in 2020.
Meanwhile, StanChart Malaysia and its Islamic banking arm StanChart Saadiq Bhd have inked a portfolio guarantee agreement with CGC for a financing scheme which will be delivered in two tranches totalling RM85 million.
StandChart Malaysia is committing up to RM75 million for the local SMEs’ development, while its Islamic arm is allocating RM10 million specifically to finance working capital for women entrepreneurs.
“We found that women are better paymasters, they are better borrowers, but still they are not present in the mainstream field.
“So, we are giving this signal to the market that we can’t do everything and support them, but we can create the focus and visibility so entrepreneurs can discuss and bring other financial institutions to come forward as well,” StanChart Malaysia MD and CEO Abrar A Anwar said.
CGC president and CEO Datuk Mohd Zamree Mohd Ishak said both StanChart and CGC have launched 11 portfolio guarantee tranches worth RM1.37 billion benefitting more than 3,300 SMEs.
“With today’s signing ceremony, we will have 13 tranches totalling RM1.46 billion,” he said.