Banks bank on SME loans amid uncertain outlook
Alliance Bank’s Kwong(left) says the SME banking segment is a significant contributor to the bank’s loan portfolio, representing 25% of the bank’s asset books. Maybank’s Hamirullah(right) tells StarBiz the bank is targeting a double-digit growth of around 21% in its SME segment financing this year, higher than the 14.9% it achieved in 2018.
PETALING JAYA: The slower economic growth anticipated this year is not putting the brakes on the small and medium enterprise (SME) segment as financing for the segment further gains traction.
While banks are cautious in their lending amid a challenging economic environment, they are aware of the bright prospects of the SME business going forward.
With about 98.5% of all businesses in the country being SMEs, coupled with the fact that the SME real gross domestic product (GDP) growth has been outpacing the national GDP growth, there is good potential for the expansion of SME financing.
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