CGC aims to cut NPL ratio to 10 per cet by 2018

KUALA LUMPUR: Credit Guarantee Corp Malaysia Bhd (CGC) aims to reduce its nonperforming loans (NPL) ratio to 10 per cent by 2018 from between 12 per cent and 13 per cent currently.

“Currently, we are clearing our books and at the same time, we are increasing our asset quality in terms of credit that we underwrite,” President/Chief Executive Officer Mohd Zamree Mohd Ishak told reporters after the launch of the BizWanita direct financing product yesterday.

Also present were Deputy Finance Minister Datuk Johari Abd Ghani and CGC Chairman Datuk Agil Natt.

Mohd Zamree said CGC would not tighten its credit policy but would ensure that those seeking to take up its loans have good business plans.

“We know that we have a challenging time currently but we are optimistic the NPL ratio will not deteriorate so much that we cannot manage the situation,” he added.

Mohd Zamree said had approved loans amounting to RM2.6 billion to date, adding he expects it to exceed its target to disburse RM3 billion in loans this year by 20 per cent.

Meanwhile, CGC has allocated RM30 million for the BizWanita product to benefit 500 small and medium enterprises (SMEs).

Chairman Datuk Agil Natt said the company aims to approve RM7 million worth of financing for the product within the next three months.

“Since the soft launch on Oct 1, we have already approved 17 applications valued at RM2.45 million,” he said in his speech at the launch here yesterday.

He added that the BizWanita product offers financing ranging from RM20,000 to RM300,000 with a financing rate of as low as base financing rate +0.20 per cent.

Agil said financing tenures range from one to seven years and the product also complies with Shariah principles for Islamic products under the Commodity Murabahah concept. With the launch of BizWanita, CGC has increased its direct-financing amount to about RM95 million.

In May 2014, CGC launched its BizMula-i direct financing product for start-ups with a fund size of RM30 million, which subsequently increased to RM65 million.

CGC has assisted over 430,000 SMEs and has issued guarantees over RM56 billion since its establishment in 1972. — Bernama