Malaysia’s largest bank has introduced its new Maybank SME Digital Financing solution for Small and Medium-sized Enterprises (SME) that it says only takes 10 minutes to approve loans.
The bank said it is looking to disburse over RM500 million for the next three months via this solution. It projects to disburse RM35 billion over the next three years and this digital loan platform will represent about 17% of its total disbursement.
Currently, three types of loan are offered via the digital channel:
SME Online Clean Loan/SME Online Clean Financing
SME Online PGX/SME Online PGX–i (70% guaranteed by CGC)
SME Online Micro Financing/SME Online Micro Financing-i
Maybank SME Digital Financing’s term financing are offered collateral-free to provide quick financing and ease the immediate cash flow needs of small businesses.
It said it also collaborating with Credit Guarantee Corporation (CGC) to provide guarantee coverage for its Online PGX/PGX-i financing, one of the products offered on the digital channel, with guarantee coverage of up to 70%. This is said to be the first of its kind digital collaboration with CGC, which shares Maybank’s focus in growing SMEs.
Registered SME businesses with turnover below RM25 million, including non-Maybank customers are eligible to apply for financing via the SME Digital Financing. Approved applicants are able to obtain financing from as low as RM10,000 to a maximum of RM250,000 with a repayment tenure of up to five years.
Maybank added that the process is designed to be hassle-free. It requires minimal information and no documentation for its existing customers.
In fact, existing customers will be informed of the bank’s decision of the application as quickly as within 10 minutes, provided the customer’s records are in order. Following that, the funds can be disbursed within a minute upon acceptance of the offer for eligible customers.
For new customers, they will have to undergo a brief onboarding verification process though they will not need to visit a branch. The decision will be provided within two working days.
Maybank group president and chief executive officer Datuk Abdul Farid Alias said Maybank SME Digital Financing is the culmination of the bank’s efforts to increase inclusivity for SME financing.
The challenge most banks face when approving SME funding is designing an approach where the risks are acceptable. Maybank said it has found a solution that enables the bank to assess the business viability and extend financing to start-ups, which often struggle to secure funding mainly due to lack of credit history or collateral.
“The launch of this solution is a breakthrough in our SME financing as it incorporates an enhanced credit tool, which allows us to expand our lending relationships beyond what we were doing before. Using our in-house data and credit knowledge while leveraging machine learning capabilities, we are now able to measure the risks of our customers better, and provide financing even to start-ups which have only been in operation for 1 year,” he said.
According to the bank, it pilot-tested the solution back in August and received positive feedback. SMEs that applied for financing expressed their satisfaction with the speed and convenience of the process, which allowed them to better plan for their business.
The launch of Maybank SME Digital Financing marks the bank’s further expansion in the digital lending space.
“The year 2020 is also the final year of our current five-year plan, which includes an aspiration to be a Digital Bank of Choice. We have plans to introduce several other digital products to provide an even better experience for our customers, including the SME Digital Financing. We will roll them out progressively during the year,” said Datuk Farid.