ABM Council Banks to Explain Why SME Loan Applications Cannot Be Considered in Phase 2 of "PARTNER"

July 15, 2013
Kuala Lumpur, Monday, 15 July 2013: Under the second phase of PARTNER, or PARTNER 2 – an initiative by The Association of Banks in Malaysia (ABM) and a majority of its Council banks which continues to aim to streamline and enhance the processes and procedures involved for SME loan applications, Small and Medium Enterprises (SMEs) will now be able to know the reason(s) why their loan application cannot be considered by participating commercial banks.

“Based on our various engagements with the SMEs, they would like to understand the rationale for a particular loan application not being able to be considered by a bank. To accommodate their request, participating banks will now adopt a template which sets out a checklist clearly identifying the area(s) in which the applicant has failed to satisfy. Hopefully unsuccessful applicants will appreciate what is lacking in their applications and work towards being better prepared in their next loan application,” said ABM Executive Director, Chuah Mei Lin.

Chuah said that the checklist to be used by the banks will cover broad reasons such as:
  1. The weaknesses of the business plan
  2. The adequacy of the security / collateral
  3. The back to back approval of Credit Guarantee Corporation Malaysia Berhad (CGC)
  4. The impact of financial records
  5. The relevance of the credit history
  6. Such other reasons which may be applicable
Banks may also choose to provide SMEs with more details than that envisaged in the template. “Owing to the nature of the information contained in the letter and in order to ensure that the letter does not fall into the wrong hands or is opened by persons who are not the intended addressee, banks will make reasonable attempts to meet with (and/or deliver the letter to) the applicant. We would strongly urge unsuccessful applicants to meet with the banks to discuss the matter in greater detail, face to face,” added Chuah.

“Under PARTNER 2, we also provide the timeline for straight-forward SME loan applications which have CGC support which should take a maximum of 52 days, so as to allow the SMEs to better plan ahead taking into account the anticipated time for such applications,” said Chuah.

“Last but not least, as a follow-up to the first phase of PARTNER and in tandem with the banks’ commitment to continuously enhance or improve the efficiency of banking services for SMEs, the timeline committed to in the first phase of PARTNER for straight-forward cases have also been further fine-tuned and shortened from a maximum of 70 days to a maximum of 43 days.” explained Chuah.

In the first phase of PARTNER, SMEs were furnished with PARTNER’s version of a loan application form, the checklists that set out the relevant documents which the applicant would require, the common timeline to be expected for a straight-forward SME loan application as well as directory of SME contact points.

A total of 10 commercial banks will be participating in PARTNER 2 for a start. The documents relating to PARTNER 2 will be rolled out by the participating banks on their respective launch date, commencing Monday, 15 July 2013. A copy each of the template setting out the checklist, the two charts depicting the two sets of timelines as well as the explanatory notes can be downloaded from ABM’s website, www.abm.org.my starting from Tuesday, 16 July 2013. SMEs may contact ABM’s hotline, ABMConnect, at 1-300-88-9980 from 9:00 am to 5:30 pm, Mondays to Fridays for additional information or for any feedback and queries.
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