This article was a transcript from the radio interview between MELODI.FM and the representative of Alliance Bank, Mr Joe Gan Wei Hian (Senior Vice President, Head Strategic Innovation & Acquiring Solutions) to discuss on the ever changing landscape which SMEs should consider with the help of effective solution and advisory.
Bank Negara Malaysia (BNM) announced that Malaysia's GDP saw a stronger growth of 14.2% in the third quarter of 2022 (3Q2022), attributable to strong domestic demand, improvements in labour market and income conditions.
Despite the uptick in business activities, there are still lingering challenges in the business landscape. Malaysian SMEs are struggling to tap on demand as they battle labour shortages, rising cost of raw materials, supply chain disruptions, challenges in obtaining loans, and lately, higher borrowing costs.
SMEs should seek assistance by taking advantage of relevant government agencies’ financing schemes available, as well as from financial institutions to help them rebuild and recover their business in the most efficient and cost-effective manner. Alliance Bank helps SMEs to face the ever changing landscape through effective solution and advisory.
Our focus has been a good strategy for the bank as we have grown our SME market share to 5% from 3.4% over the last 5 years, driven by SME loans which the bank is growing two times faster than the industry average. Our aim over the next 5 years is to double our market share to 8%.
We will continue to deepen our customer engagement in order to achieve our target and leverage on strategic partnerships to expand our reach.
Digitisation and workforce development has been a key focus in driving the Bank's strategic priorities. We take a customer-centric approach by complementing fast, simple and convenient solutions with responsive customer service, simplifying the banking experience for our customers which is a part of what we call the Alliance Way.
As a bank, our core remains offerings of the financial type. Over the years, we have expanded what we offer, in line with the growing needs of our customers.
We offer access to funding with the aim of making it a quick and hassle-free process, thus freeing up the business owner's time to focus on what's important to them. There are several government assistance schemes that eases access to funds for eligible SMEs at reasonable cost and also Credit Guarantee Corporation's Flexi Guarantee Scheme.
Via Digital SME, we also offer access to collateral-free financing of up to RM1 million for eligible SMEs. They can even apply for this loan online, in line with making things efficient as I've mentioned. Many things are now available online from Alliance Bank because digitalisation is a key tool to achieve efficiency in today's age. We are proud to be a bank that brings digital solutions to our customer first incuding the BizSmart® e-Trade which is a 100% digital trade financing platform.
The bank is also building up its ability to offer non-financial assistance for our customers via advisory, trainings and more at the same time. Banks can play a bigger role in helping businesses grow in the direction they want to, to capture new opportunities because this equals growth for everyone within the ecosystem.
One of our initiatives is the BizSmart® Solution portal which is a business-to business community platform that provides SMEs access to solutions and services, reach out to customers and digitize, all at preferential rates.
A growing challenge for businesses is also the need adopt good ESG practices. ESG is short for environment, social and governance, practices. This call follows a global shift towards sustainability. SMEs, being the backbone of the country, have a great impact on the nation and as a bank, we have been working towards creating ecosystems with subject-matter experts such as UNGC and MGTC to help SMEs adopt ESG.
Currently, we are just about clear from the precautionary stages that arose from the height of the Covid pandemic. There are many factors that point to business-as-usual for businesses including the full opening of economic activities.
Globally, there are still many challenges leftover from the pandemic's effects that are still being addressed. There is the expectation of economic uncertainty and slowdown and it is prudent for businesses to look to having strong fundamentals when facing these times. This means things like having a good buffer in their cash flows, closely monitoring their costs and managing it and even looking into expanding their sales channels and markets.
Alliance Bank has always supported the SME industry. During the lockdown, we pivoted to launch the #SupportLokal initiative which is a campaign that supports SMEs to scale up their business digitally during the MCO period. We not only helped with digital branding and marketing but we also provided them a platform to reach out to customers and businesses in those tough times. We also collaborated with several e-commerce platforms to help small businesses widen their reach even further with subdisided e-commerce commission fees. As a customer-centric bank, we will continue to work on initiatives such as these to support our community.
We have talked about the ecosystem the bank is building to address new local and global challenges and also expanding our offerings to help businesses meet their growing needs. In a way, we too are looking at the basics and enhancing them to meet the demands of businesses today but with an eye on the future. Banks have also expanded beyond just being the place where businesses go to for their financial needs. We are the working partners for businesses to grow by leaps and bounds. Our track record does prove that we are succeeding in walking the talk so we will continue on, always keeping our customer in mind and making sure we continue staying relevant through our various products and services.
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