KUALA LUMPUR: AmBank Group Bhd (AmBank) is targeting to have a total of RM11.6 billion of loans application for the small and medium enterprises (SME) business, and out of that, a disbursement of some RM5 billion by the end of this financial year.
Managing director for business banking Christopher Yap Huey Wen said though the segment is congested, especially when many other financial institutions who are also aggressively pushing their product in the SME lending business space, there are still plenty of opportunities 'if it is done right.'
"If you look at SME as one whole segment, than you are already doing it wrong,” he said.
"You can’t treat an SME company who pushes RM2 products the same way you would with another SME company that has 200 employees and with machineries. We are cognizant of these differences and that’s what makes our proposition more attractive than others," Yap told NST Business in an exclusive interview.
He explained that between a small SME and a larger one, there is still a huge untapped portion of SMEs that lies 'in the middle'.
"AmBank used to only do business with the bigger SMEs that might need loans of above RM25 million or the smaller ones that need loans below RM1 million, but we didn't have a dedicated team to cater to the SMEs who are in the middle,” he explained.
"Because of that, we did lost out on businesses. But now we do and this is the area that we are very keen to grow," Yap pointed out.
AmBank Group's Business Banking division, is the dedicated division to handle SME lending business for the banking group.
The division comes directly under the AmBank Top Four (T4) strategy which envisions the bank becoming one of the country's top four financial institution (FI) by focusing on its four growth segments which are mass affluent, affluent, SMEs and mid corporate.
One of the targets of the T4 is also for the SME segment to contribute up to a quarter, or 25 per cent of the bank’s total revenue, also by 2020.
Yap also shared that the bank’s preferred sectors for SME banking are wholesale, retail, trade and manufacturing.
These segments, according to Yap make up some 80 per cent of the total SME landscape in Malaysia.
"We do see a lot of potential for SMEs in manufacturing and even, logistics. For manufacturing, we even created a dedicated loan for them which is the Industrial Hire Purchase (IHP) loan for them to buy machineries.
"In the past, it was difficult for them to get loans specifically to buy machineries but with the AmBank’s IHP, this was made possible,” he said.