“We have looked at the business loans such as the corporate loans and the affordable housing project loans. The approval rate is still maintained at around 70-73%.
“As far as access to financing is concerned, we don’t have any particular concern.
“But we do realise that there might be companies that are deprived of financing, and in helping to tackle the issue, Credit Guarantee Corporation Malaysia Bhd (CGC) in February launched Malaysia’s first SME loan/financing referral platform,” he told reporters at a media briefing on the release of the BNM Financial Stability and Payment Systems Reports 2017 here today.
The CGC, which is 78.65% owned by BNM, targets to have over 2000 SMEs benefit from the newly launched the imSME platform this year.
Muhammad said the platform would benefit, among others, micro, small and medium enterprises.
It serves as an online one-stop-centre for SME loan/financing by providing an array of financial products and services offered by participating banks and agencies.
Muhammad also said that many loan applications were rejected due to the way they were processed and how they were being presented. Therefore, this advisory services platform could help improve the loan approval rate.
“Banks are in the business of giving out loans… if they don’t give out loans, they will not get any profit and in turn cannot pay the depositors. Banks are actually are in the public trust so they need to use money diligently,” he added.
Asked about foreign insurance companies’ request for a waiver on the directive to reduce their shareholding in local operations, Muhammad said: “They are in the midst of negotiation (with the domestic investors), so let the negotiations proceed … we are not in a hurry.”
It was reported that the foreign insurance firms had given their commitment to the central bank to pare down their shareholding when they first got their licences and that the central bank gave them until June 2018 to fulfil their promises.
Last year, BNM asked foreign insurers to raise the local ownership of their Malaysian operations to at least 30% in order to lift domestic participation in the industry.
Report: Foreign insurance firms want review of local ownership rule
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