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GTFS Outreach Program For FIs and Industries

GTFS Outreach Program For FIs and Industries (Kuching 14/8 & 15/8/2014) By Hj Raja Taufik Azad Ahmad Suhaimi SVP, Product & Bumiputera Development. ORDER OF PRESENTATION. About Credit Guarantee Corporation

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GTFS Outreach Program For FIs and Industries

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  1. GTFS Outreach Program For FIs and Industries (Kuching 14/8 & 15/8/2014) By Hj Raja Taufik Azad Ahmad Suhaimi SVP, Product & Bumiputera Development

  2. ORDER OF PRESENTATION • About Credit Guarantee Corporation • Objective & Primary Role, performance & network of branches • Challenges Faced by SMEs • CGC’s Role in Bridging the GAPs • Guarantee Schemes Available • CGC’s Role in GTFS • Operational Procedures & Guidelines • Reasons of Delay / Return / Reject • GTFS Performance as at 31st July 2014 • Changes to GTFS

  3. About Credit Guarantee Corporation

  4. 1. About CGCObjective & Primary Role

  5. 1 About CGCCGC Performance CGC has guaranteed more than 422,700 loans (RM53 b) since 1972 • Loans guaranteed doubled in 12 years • To date, CGC has implemented 34 different schemes (funded /guaranteed)

  6. Alor Star 28/08/2000 Kota Bharu 18/06/2001 Kuala Terengganu 26/11/2001 Prai 25/06/2001 Ipoh 9/10/2000 CGC works closely with FIs and their branches (estimated at 3000 nationwide) Kuantan 28/05/2001 Main Branch 3/07/2000 Kuala Lumpur 3/11/2003 Seremban 23/07/2001 Melaka 21/04/2001 Batu Pahat 3/11/2003 CGC Networks Johor Bahru 6/11/2000 6

  7. Kota Kinabalu 21/01/2002 Sandakan 19/01/2004 Miri 24/02/2004 Kuching 21/01/2002 CGC works closely with FIs and their branches (estimated at 3,000 nationwide) 7

  8. Challenges Faced by SMEs

  9. 2. Challenges Faced by SMEs UNAVAILABILITY OF COLLATERAL & TRACK RECORD HIGH COST OF FINANCING CHALLENGES SMEs FLEXIBILITY OF TERMS TIMELY DELIVERY OF SERVICES

  10. CGC’s Role in Bridging the GAPs

  11. 3. CGC’s Role in Bridging the GAPS Challenges Solutions SMEs FIs SMEs FIs CGC • CGC will continue to enhance its developmental role • Provide greater comfort to FIs to continue lending to viable SMEs • Higher Guarantee Cover for strategic products • Simplified Claims Processing • Faster Claims Pay-out • New Products • Start-Ups • New Growth Areas

  12. 3. CGC Roles in Bridging the GAPS Challenges Solutions SMEs FIs SMEs FIs CGC • To review overall financing cost to SMEs • Review guarantee fee pricing structure for more competitive pricing e.g. incentive/ rebate for good borrowers • On going discussion with banks to lower interest / profit rate • (Phase 1 : blended rate completed) • (Phase 2 : consider BLR or lower)

  13. Guarantee Schemes Available

  14. 4. Guarantee Schemes Available Current Schemes Loan Applications via CGC Branches Loan Applications via Financial Institutions Direct Access Guarantee Scheme Enhancer /Enhancer-i GTFS /GTFS-i Enhancer Excel IPFS TabungProjekUsahawanBumiputera-i (TPUB-i) Enhancer Express Flexi Guarantee Scheme Franchise Financing Scheme New BizMula-i

  15. Features of GTFS

  16. 9. Changes to GTFS

  17. CGC’s Role in GTFS

  18. 5. CGC’s Role in GTFS • To manage, administer & monitor GTFS on behalf of MOF – including processing guarantee applications & claims. • To submit monthly & quarterly reports on scheme performance to GreenTech Malaysia, BNM & MOF.

  19. Operational Procedures & Guideline

  20. 6. Operational Procedures & Guidelines MGTC to arrange for Financial Risk Assessment session by borrower to FIs

  21. CGC checks compliance on guidelines for approval. No credit evaluation performed

  22. GTFS Performance as at 31st July 2014

  23. 8. GTFS Performance as at 31st July 2014 Out of 77 returned cases, only 5 cases amounting RM126.3 million have yet to be resubmitted by Fis.. Out of 23 rejected cases, 13 cases were resubmitted and subsequently approved by CGC.

  24. Details of rejection are as follows:-

  25. Reasons for Delay / Return / Reject

  26. 7. Reasons for Delay / Return / Reject • Common reasons for delay in guarantee processing • Waiting for the following documents to be faxed by FI:- • Missing pages of Approved AA/credit memo • Green Certificate / List of Green Components • Common reasons for return or queries to FIs:- • Incomplete submission :- • No submission of Approved AA/credit memo • No submission of Green Certificate / List of Green Components • Financing amount includes upfront profit.

  27. Common reasons for rejection:- • Non-compliance of scheme guidelines:- • Exceed Single Group Exposure Limit of RM10 million under User and RM50 million under Producer • Approved financing under GTFS is not in-line with List of Green Components by MGTC e.g. FI approved for working capital financing while List of Green Components indicate Capital Expenditures.

  28. Two (2) important things to overcome the identified operational issues:- • To ensure COMPLETE submission where ALL pertinent documents required are provided. • To ensure applications submitted COMPLY with the eligibility criteria of the GTFS guideline. CGC does not perform any additional credit evaluation on GTFS applications.

  29. Changes to GTFS

  30. MOF is agreeable to reinstate the original benefit under GTFS. Notification to all PFIs on 13th February 2014.

  31. Notification to PFIs

  32. Letter from MOF

  33. Introduction of Rebate Mechanism High Fees REBATES via • To reward GOODcustomers • As high as 30% discount on annual guarantee fee in 2014 • 1800 borrowers are eligible in 2014 • To also promote sound credit culture amongst the SMEs

  34. WhoQualifies? • Good conduct of accounts /credit behavior • No adverse record on the existing loan facility • Aged more than 1½ years with CGC • Rebate upon next LG issuance • Eligible schemes – DAGS, Enhancer/Enhancer-i, Enhancer Bumi, Enhancer Direct & Enhancer Excel.

  35. of Rebates • Reduce cost of borrowing – as part of the National Agenda to assist SMEs • Ease cash flow of SMEs in early stages of growth • Good customers indirectly enjoy “discount” in total guarantee fees charged. • Encourage and motivate customers to consistently maintain their good conduct of account / credit behavior. Effective Date: January 2014 ** Upon LG Renewal

  36. As at 31st July 2014 . . REBATE has been granted to 299 customers valued of RM220,944.50

  37. How to contact us?

  38. CGC Hears You Contact Us :- Hj Raja Taufik 03-78053448 taufik@cgc.com.my Mohamed Suffri Mohamed Yusop 082-424 200 suffri@cgc.com.my

  39. CLIENT SERVICE CENTRE Or www.cgc.com.my

  40. THANK YOU

  41. QUESTIONS & ANSWERS

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