KUALA LUMPUR, 29 May – Credit Guarantee Corporation Malaysia Berhad (CGC) and the Banco Central de Timor-Leste (BCTL) today signed a Memorandum of Understanding (MOU) to collaborate on the development of credit guarantee/financing schemes for Small and Medium Enterprises (SMEs) for Timor-Leste.
With the signing of this MOU, CGC shall offer assistance to BCTL to develop and design credit guarantee schemes, procedures and other operational matters. CGC will also assist with the setting up of a credit guarantee institution or unit to manage the guarantee scheme for BCTL.
Through this alliance, CGC and BCTL will participate and collaborate to organise research, seminars, trainings, and study visits to promote the enhancement of knowledge and skills which is deemed vital for the management of credit guarantee scheme in Timor-Leste.
The Deputy Governor of Bank Negara Malaysia, Dato’ Muhammad bin Ibrahim who had officiated the MoU signing ceremony said “CGC has certainly proven its mettle in supporting small businesses over the last few decades and has the necessary experience and expertise to assist Banco Central de Timor-Leste, to develop financing schemes for the SMEs in the agricultural sector.”
“Strategy-wise, the development of SME sector is crucial in ensuring a balanced growth and shared prosperity as the country transitions into a high value-added and high-income economy,” he said adding that CGC was very much part of the Malaysia SME sector development over the last few decades and has done well in providing the much needed support to the ever-progressing and expanded nature of the Malaysian economy.
“Bank Negara Malaysia has established a holistic ecosystem to support SMEs accessing finance and CGC is an essential component in the ecosystem, playing an important role to address the concerns of the SMEs especially those emerging ones which are traditionally considered riskier to finance,” he added.
“The MOU that we are signing today is an important step along our development path. It formally documents an agreement between CGC and BCTL whereby the two parties will work together in a way that we hope will determine the future structure of finance for SMEs in Timor-Leste,” said the Governor of BCTL, Abraao de Vasconselos.
“Bank Negara Malaysia has supported the Central Bank of Timor-Leste from its inception in a wide range of activities. In particular, BNM provided BCTL with valuable support during the development of our Financial Sector Master Plan through review and advice,” he added.
“It has become apparent during various visits to Malaysia that CGC has developed a number of innovative and effective schemes for supporting the development of the Malaysian economy. We in Timor-Leste welcome the opportunity to study these schemes in more detail and learn from Malaysia’s valuable experience with schemes that we would like to mimic,” added Mr. Abraao.
CGC’s President and Chief Executive Officer, Mohd Zamree Mohd Ishak said the mutual understanding reached by CGC and BCTL will provide a new course for CGC to share its 43 years of experience and expertise in enhancing SMEs access to financing.
Zamree said, “This cooperative relationship with BCTL is fundamental for a continuous development of its credit guarantee services, and CGC is committed to assist and share our solid foundation to help them to achieve their vision, which is to serve and provide access to financing for the sound growth and development of SMEs in Timor-Leste”.
CGC has been in the forefront of SME development not only in Malaysia but also at international front assisting countries such as Papua New Guinea and Mongolia.
In 2013, CGC signed MOUs with Papua New Guinea and Mongolia to establish credit guarantee institutions to further enhance SME financing in their respective countries.
CGC is also a member of the Asian Credit Supplementation Institution Confederation (ACSIC) and the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), playing an active role in sharing its knowledge and expertise with member countries. In 2014, CGC hosted the 27th ACSIC Conference which was attended by 141 delegates from 19 member institutions in 12 countries in Asia.
The MOU was signed by CGC President and Chief Executive Officer Mohd Zamree Mohd Ishak and the Governor of BCTL Mr. Abraao de Vasconcelos, witnessed by the Deputy Governor of Bank Negara Malaysia, Dato’ Muhammad Ibrahim and CGC Chairman, Dato’ Agil Natt. The signing ceremony was held at Sasana Kijang, Bank Negara Malaysia.
CGC has cumulatively guaranteed close to 430,000 loans SME loans valued at RM56.1 billion since its establishment in 1972. For 2015, CGC targets to provide RM3 billion of financing which is expected to benefit about 7,850 SMEs.