CIMB expects to increase its share of the SME sector in Singapore in the future. The bank has aggressive plans to link the SME sector in China which wants to penetrate the global halal market.
The bank plans to double its market share from 3 percent to 6 percent by 2021 for its small- and medium-sized enterprise (SME) banking business in Singapore. To achieve the ambitious target, it launched the ASEAN-China Halal Corridor initiative last year. The initiative is a trade network linking halal businesses across China and the region. It encompasses agribusiness, cosmetics, food and beverage, fashion and pharmaceutical sectors in the region. The bank has seen a growing interest among SMEs in Singapore, with strong participation in a recent CIMB halal corridor workshop.
“Among the segments that we are going global, a lot of cross-border SME regional flows are manufacturing and trade, F&B (food and beverage) including the halal market, and the agricultural commodity sector”, said Yong Jiunn Run, head of CIMB commercial banking.
China’s halal sector is expected to reach $1.9 trillion by 2021, and there is a potential customer base of 266 million in ASEAN and China alone. While helping F&B companies to obtain halal certification, the bank discovered that this group of SMEs usually tries to obtain Islamic financing from potential Muslim investors. As a response to an increasing interest in the sector, the bank started focusing on the SME sector.
Since 2014, the bank has seen a take-up rate among SMEs for Islamic financing grow by more than 48 percent per annum.
Besides tapping into Islamic finance, the bank recently refreshed its current account offering for businesses, also known as CIMB BusinessGo (BizGo), to provide a unique investment product.
First launched in January 2017, the new bundle aims to address SMEs’ needs in the market that are not being met by the current incumbents, said Ian Chan, CIMB Bank Singapore’s co-head of transaction banking and regional head of digital banking.
The most important features of the new product offering include free FAST (Fast And Secure Transfers) transactions, best forex rates guaranteed for transfers to Malaysia, and interest rates of up to 1.88 percent per annum, amongst the most competitive in the market. “It’s a product we revamped for two reasons – first and foremost, it’s CIMB’s 10-year anniversary in Singapore”, Chan said.
“Secondly, we also want to announce to the market that we want to grow our SME segment and help our clients to their businesses into ASEAN and beyond”.
While CIMB is evaluating an application for the digital banking licenses that are up for grabs in Singapore, Yong is against the idea of pursuing the license just for the sake of it.
“If you want to go into the digital banking arena, you have to ask yourself what customer pain points are you trying to resolve? Understanding these key pain points of the customer will help us tailor our services to the growing needs of the SME sector here”. “If those basics can be achieved without going digital, we may need to adopt new technologies to reach out to the target SME sector”.