21 August 2018
UOB Malaysia offers collateral-free loans to SMEs
United Overseas Bank (Malaysia) has entered into an agreement with Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) to offer government-guaranteed financing to small- and medium-sized enterprises (SMEs). SJPP is an administrator and manager of credit guarantee schemes under Malaysia’s Ministry of Finance. Under the agreement, SMEs can obtain collateral-free loans of up to RM1 million through the SJPP-UOB BizMoney financial solution. This is twice the amount available to customers under the existing UOB BizMoney package. SJPP will guarantee up to 70 per cent of the loan through its Working Capital Guarantee Scheme and Services Sector Guarantee Scheme.
Mr Wong Kim Choong, Chief Executive Officer, UOB Malaysia, said that the partnership with SJPP will help SMEs gain access to additional financing to capitalise on more business opportunities and to meet their working capital needs. “UOB Malaysia’s six decades of experience in serving Malaysian SMEs gives us a deep understanding of the opportunities and challenges they face. According to our research, more than half of Malaysian SMEs expect to grow their revenue in 2018. While the majority aim to expand overseas, many also plan to invest in technology infrastructure to help them drive business performance. To help businesses capitalise on these opportunities and to help them grow, UOB Malaysia is collaborating with SJPP to provide SMEs the flexibility of obtaining additional working capital without the need for more collateral.
UOB Malaysia defines its SME customers with RM50 million annual sales turnover and below or full-time employees not exceeding 200 workers in the manufacturing sector; or annual sales turnover not exceeding RM20 million or full-time employees not exceeding 75 workers in services and other sectors.
The ASEAN SME Transformation Survey was conducted by UOB, EY and Dun & Bradstreet in late 2017 with 1,235 SMEs across the six largest ASEAN countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – to understand how ASEAN SMEs are positioning themselves to participate in the region’s growth and to adapt to the changes ahead. More than 200 SMEs in Malaysia participated in the survey. According to the same survey, 54 per cent of Malaysian SMEs expect to grow their revenue in 2018, while 44 per cent of them have ambitions for overseas expansion. In addition, 65 per cent of companies surveyed said they intend to invest in technology infrastructure to help them drive business performance.
“We also help SMEs increase their productivity for business growth. By providing scalable digital solutions, such as UOB SmartBusiness, we help them streamline and automate their administrative systems and processes. We also offer SMEs a wide range of term-financing solutions to meet their working capital needs or to acquire fixed assets,” Mr Wong said.
The SJPP-UOB BizMoney financial solution provides flexible repayment tenures of 18, 24, 36, 48 or 60 months, with interest rates starting from 0.54 per cent per month. Dr Nungsari Ahmad Radhi, Principal Officer of SJPP, said that the government is committed to providing continuous support to SMEs through various initiatives, products and services. This includes the various government-guaranteed schemes managed by SJPP that have benefited more than 13,000 enterprises. “We are pleased to work together with financial institutions such as UOB Malaysia to assist and to reach out to as many SMEs as possible. Our low guarantee fees between 0.5 to one per cent, coupled with the underlying sovereign guarantee, offer SMEs financing at competitive rates. This will contribute towards their growth and sustainability. We believe in developing vibrant and healthy SMEs that are integral to Malaysia’s economic transformation process,” Dr Nungsari said.