KUALA LUMPUR — Micro, small and medium enterprises (MSMEs) will have increased access to financing with the merger of Bank Pembangunan Malaysia Bhd (BPMB), Exim Bank, and SME Bank, the Finance Ministry said.
The merger will also provide them with a variety of financial products for their needs, including working capital loans and export financing, the ministry said in a written parliamentary reply.
“MSMEs that previously faced difficulties in obtaining financing, especially in certain sectors, can be better assisted,” the ministry said in its reply to Datuk Seri Wee Ka Siong (Ayer Hitam-BN), who asked it to state the impact of the merger on MSMEs.
Previously, there were concerns about the merger and the new entity’s ability to continue serving the needs of smaller entrepreneurs.
The ministry said the consolidation of the three banks was also timely, as after their 20 to 50 years of existence, the institutions needed to improve their operational efficiency and be more aligned with the government’s mandate to be catalysts for economic resilience.
“In this regard, the focus on the current market segment covering MSMEs and medium and large traders will be maintained and will even be streamlined through an end-to-end financing network as all three banks will be under one roof.
“This restructuring will also lead to increased efficiency in the delivery of financial services. …(by reducing) administrative costs and increase the efficiency of the loan approval process,” its written reply said.
Within the first three years of the merged entity’s operations, it expects operating costs to be reduced by RM160 million and increased income of RM400 million.
“The reduction in costs and increase in income are the result of an increase in the capital capacity of the merged entity by RM6.3 billion which will benefit more borrowers including the MSME group with 38 thousand transactions,” said the ministry.
BPMB, the shareholder of SME Bank and Exim Bank, and which is leading the merger, will ensure the new entity finances large-scale projects but not set aside the development of MSMEs, the ministry added.
In October, Prime Minister Datuk Seri Anwar Ibrahim also addressed concerns that the merger would result in the new entity becoming more profit-centric at the expense of the national goals to assist small entrepreneurs and businesses.
Anwar, who is also the Finance Minister, said the Bumiputera agenda will remain a top priority under consolidated entity. – December 6, 2024