KUALA LUMPUR: The average loan growth may be moderate but the small and medium enterprise (SME) loan expansion is set to continue growing very fast at Alliance Bank Malaysia Bhd.
Group chief executive officer Joel Kornreich said the bank was still aiming for a double-digit growth in its SME loan expansion in the current financial year ending March 31, 2016 (FY16), expecting a steady pace enjoyed since it started focusing on the sector five years ago.
“SME is our fastest growing portfolio, it grew 27% last year, and we will continue focusing on it,” said Kornreich after the bank launched its SME Innovation Challenge programme here on Thursday.
The SME Innovation Challenge for young Malaysian SME entrepreneurs is back for the third year with prizes worth RM1mil up for grabs.
To enter the challenge, young entrepreneurs, who have been in business for up to three years, are invited to submit their business plans online at www.bizsmart.com.my from now until Sept 1, 2015.
Kornreich said the bank foresaw an average loan growth of only 8% plus in the current financial year (FY16) compared with a loan growth of almost 14% in the previous financial year.
“There will be margin compression and a slowdown on loans that have higher risks than returns but no slowdown at all for the SME segment.
“The bank has one over eight (or 82,500) of Malaysia’s 660,000 SMEs as its customers and wants to expand it to 100,000 (SMEs) in FY16.
“SMEs contribute almost half of the banking receivable and would be growing very fast,” he added. - Bernama