Source from (The Star Online): http://www.thestar.com.my/Business/SME/2013/07/19/40year-journey-turned-into-book.aspx
Published: July 19, 2013
Creating a better underst anding: Datuk Muhammad Ibrahim (centre) going through the Catalysing SME Growth while Wan Azhar Wan Ahmad (right) and Md Agil look on.
The book was officially launched by Bank Negara Malaysia (BNM) deputy governor Datuk Muhammad Ibrahim
Catalysing SME Growth is aimed at creating a better understanding of its role among stakeholders, in particular the small- and medium-sized enterprises (SMEs).
The book documents CGC’s role in promoting the growth and development of SMEs through its guarantee schemes over the last 40 years.
CGC initiated the documentation of its 40-year journey to share with all its stakeholders the compelling story of the first fully dedicated SME-support institution in the country, which had shaped the SME sector landscape of Malaysia to a significant extent.
“CGC was established against the backdrop of Malaysian economy that was heavily reliant on volatile primary commodities such as rubber and tin.
“It was during a period of great disparities in income distribution among the populace notwithstanding the problems of poverty and unemployment,” said CGC chairman Datuk Md Agil Mohd Natt.
“A new development strategy was unveiled under the Second Malaysia Plan (1971-1975) aimed at alleviating the problems of poverty, unemployment and economic disparities.
“It was within this economic environment with the country poised for economic restructuring that CGC was established.”
Incorporated on a paid-up capital of RM2.5mil, CGC’s mandated role was clearly defined to assist marginal but potentially viable SMEs in obtaining credit facilities from the financial institutions.
In its formative years, CGC, as a developmental financial institution, played a socioeconomic role in supporting the country’s economic development agenda.
It complemented the banks in financing the SMEs in the agricultural, commercial and industrial sectors with small loans ranging from RM5,000 to RM75,000.
“It approved close to RM12mil of loans in its first year of operation as opposed to an average of RM3bil currently.
“CGC, a Bank Negara initiative, was inspired by similar bodies that were set up by the World Bank and central banks around the world, which had been successful in helping to improve the accessibility to financing by businesses,” said Md Agil.
In the introductory message of the book, Bank Negara Malaysia Governor Tan Sri Dr Zeti said the CGC is a key institutional arrangement in facilitating greater access to financing by the SMEs.
By providing guarantee to loans obtained by SMEs, CGC addresses one of the main constraints of SMEs, that is, the lack of collateral.
Zeti also said CGC had functioned as a key enabler in supporting the growth of SME financing.
By being the link between financial institutions and SMEs, CGC has developed a deep and broad knowledge on the challenges and the needs of SMEs and is well-positioned to leverage on its existing links with the SME community.”
“BNM, as the largest shareholder of CGC, is committed to ensuring that CGC continues to play an effective role in assisting viable SMEs with inadequate collateral and track record through enhancing SMEs’ access to financing,” she said.
Since July 1972, with an authorised capital of RM20mil, CGC had managed 42 guarantee schemes tailored to suit the specific needs of the SMEs in every sector of the economy and has been consistently looking out for innovative ways to improve SMEs outreach especially in the financing of smaller businesses.
To date, CGC has guaranteed a total of RM51.4bil of loans, benefitting over 420,000 SMEs.
“CGC is more commercially-oriented these days which Bank Negara believes is crucial for CGC to maintain its financial sustainability while performing its developmental role effectively,” said CGC managing director, Datuk Wan Azhar Wan Ahmad.
The book launch, held at Sasana Kijang in Bank Negara Malaysia, was attended by about 400 guests.
