Affin Bank set to ramp up SME and commercial business

This year, the bank hopes to be ‘on par or better’ than most competitor banks in terms of speed of approving loans


Affin Bank Bhd has been working hard to re-engineer its approach to banking with small and medium enterprises (SMEs). At the same time, it has also been making major tweaks to its commercial business.

After two years of setting up a division to handle SME and commercial business, things are coming into shape at the Malaysian financial institution.

The bank is pushing up a notch its value proposition to clients — and it’s doing so by providing a marked difference in its service.

Take SME and commercial business loan approvals, for example. In the past, it took about two to four months to make a decision on a business loan, be it a big or small loan. Now, it has been trimmed down to two to three weeks.

“To me, even that is still too long. It should go down to a week, or a week-plus at most,” said Affin Bank SME and commercial business director Lim Kee Yeong (picture).

What will bring that down? Automation. He said the bank is currently undertaking various projects that will be rolled out in the second half of 2019.

“It will bring the turnaround time even lower. It will be a game changer for the bank,” he told The Malaysian Reserve.

This year, he said the bank hopes to be “on par or better” than most competitor banks in terms of the speed of approving loans.

“The speed of loan approvals will come collectively to the customer as a proposition,” he said.

At the same time, the bank is also working on its digital banking which will allow customers to do a lot more tasks. Come 2020, he believes that customers will see a very different bank.

Lim is no newbie to the SME business segment. He joined Affin Bank in September 2016 with the responsibility to develop and implement strategies to drive the growth of SME and commercial business for the bank.

The division handles, among others, deposits, loans, trade facilities, cash management, as well as bancassurance/bancatakaful, both conventional and Islamic.

Lim had spent more than two decades in banking and finance, primarily in the commercial and SME businesses at both local and foreign banks.

Immediately prior to joining Affin Bank, he was with Singapore investment company Fullerton Financial Holdings Pte Ltd where he helped manage various entities in the Asia-Pacific region.

“I’ve always had a passion for SMEs and start-ups. SMEs are the backbone of the country and there is so much room for growth. It’s my little way of contributing back to society,” he said.

Different Proposition

According to Lim, Affin Bank wants to run a different SME business.

“Some financial institutions run by way of volume, pricing or just retail approach in some sense. Nothing wrong here. Knowing Affin Bank’s niche and style, it’s not practical to compete in those areas.

“We run on a very relationship-based model. We serve the whole spectrum of SMEs, literally from the day they start up, something that most banks don’t do. We build up the proposition from the day you start your business,” he said.

As proof of the pudding, Affin Bank even has kiosks at various offices of the Companies Commission of Malaysia — popularly known by its Malay acronym of SSM — where you would go to register a new business.

“When you register your company, we can offer you a current account, Internet banking and a host of things that a start-up would need. Soon, we will also start offering financing to them,” he said.

The team at Affin Bank promises to work with clients from the time when they are new and small in size, to the time when they may want to go for listing.

“We can serve clients up to the commercial level. If they want to go public, we can transfer them to our corporate banking team or investment banking side,” he said.

Relationship Model

One key difference at Affin Bank is how its relationship model pans out. Naturally, it runs differently at different banks. At Affin Bank, Lim said customers can feel the difference.

“Here, they can engage with the CEO and even at times with the bank chairman, and down to the relationship managers,” he said.

The bank also actively organises events of all kinds, many of which are designed to attract smaller groups of about 50 people.

“We do them regularly. We get customers to talk about issues. It’s done over food as Malaysians love food. Here, we get to better understand their needs,” he said.

The benefits are real and measurable — a good SME would recommend their colleagues or peers for a banking relationship if they received good service.

“A good customer will typically commend another good customer. That’s where we build lasting portfolios,” he said.

In 2018, he said the bank was able to sign up close to 6,000 SME customers, including those for deposits. This year, the bank expects to bump up the number by 25%.

“It could have been more. We are ramping up quite fast. We have new names, new leads, new business products and, more importantly, a new approach to this business,” he said.

SME Lending

Lim said Affin Bank’s SME banking is growing faster than the market for 2018 in percentage terms, easily three to four times the market in general.

But this is only to be expected, as the numbers are growing from a small base.

Affin Bank did not previously have SME banking. It came about under a bank transformation programme which earmarked SMEs as a segment for growth.

“Over the last two years, we hired close to 300 people for this segment. We have put in new processes, set up new business centres, created a new sales team and rolled out a new approach to the business,” he said.

During that period, Lim said the bank’s SME and commercial division has been able to improve its asset quality. “We have been able to cut the loss rate by half.”

Moving Forward

Lim said the bank is looking at an interesting year now that they have a set of “good customers”.

“It’s an interesting year filled with uncertainties and complexities, as well as opportunities.

“For those prepared to take calculated risks, it can be a wonderful year for both banks and customers,” he said.

In view of some of the potential complications this year, Lim advises SMEs to consider expanding or acquiring a little more credit facilities, as long as their financial management is tidy and prudent.

“It could come handy if, say, your supplier suddenly delays payment. It can be used in emergencies, and perhaps for one or two opportunities