Technical Cooperation
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- Technical Cooperation
- Technical Cooperation for SME Bank, Malaysia
JFC-Micro cooperates with financial institutions, which are trying to overcome several challenges, in developing countries by providing its know-how in MSME finance. JFC-Micro conducts seminars in their countries and in Japan based on collaboration with ODA implementing organizations, etc.
Technical Cooperation
for SME Bank,
Malaysia
JFC-Micro has provided technical cooperation for improvement of credit analysis to SME Bank, Malaysia as an ODA project of Policy Research Institute (PRI) of Ministry of Finance (MOF), Japan.
Outline of SME Bank, Malaysia
In Malaysia, strategic policies for development of SMEs have been implemented based on the recognition that such development will contribute greatly to the national economy.
In October 2005, SME Bank, Malaysia was established in order to provide financial and managerial support for SMEs, as a result of merger of SME finance department of the Development and Infrastructure Bank of Malaysia and the Industry and Technology Bank of Malaysia.
| Organization | Government-owned Development Financial Institution |
|---|---|
| Objective/purpose | Offers financial and business advisory services and credit guarantee for SMEs |
| Established | October 2005 |
| Branch offices | 19 Branch Offices |
| Employees | 995 |
| Outstanding Loans | Approximately USD 1,299 million |
(As of December 31, 2010)
Background of JFC-Micro's Technical Cooperation
SME Bank, Malaysia started financing for SMEs based on the government's policy, but its loan outstanding remains small at the moment, as it was just established recently. Thus, it is required for them to meet the strong demand from the SMEs more promptly.
Under such a situation, the bank asked PRI for technical support. Considering the achievement by JFC-Micro in the Technical Cooperation for Vietnam Bank for Social Policies, PRI asked JFC-Micro for technical cooperation. Hence, JFC-Micro has been providing know-how for financing for Micro and Small Enterprises (MSEs) and business start-ups promptly since December 2008.
JFC-Micro's activities for SME Bank, Malaysia
Goal : Shortening the time for Credit Analysis
September 23 - 28, 2007
Preliminary survey
JFC-Micro conducted a field survey in order to figure out the necessity of technical cooperation. Executives of SME Bank, Malaysia officially asked for the provision of JFC-Micro's know-how.
December 15 - 20, 2008
Signing ceremony on Record of Discussion (RD) and Seminar in Kuala Lumpur (KL)
JFC-Micro signed the RD and conducted a seminar for executives and staff of SME Bank, Malaysia. Questionnaire result showed that the seminar participants understood JFC-Micro's credit analysis correctly.
[Questionnaire result (excerpt)]
Average of 5-grade evaluation ( 5 : Very Satisfactory ~ 1 : Very Unsatisfactory )
| Term | Average |
|---|---|
| Seminar Contents | 4.58 |
| Seminar Materials | 4.74 |
| Lecturers | 4.26 |
August 31 - September 4, 2009
Meeting with representatives of SME Bank
Representatives of JFC-Micro and PRI visited SME Bank in Kuala Lumpur to discuss further plan of this project. As a result, both sides agreed to hold a seminar in Japan in January 2010. In addition, JFC-Micro explained the outline of credit analysis method for business start-ups as a preliminary lecture.
January 25 - 29, 2010
Seminar in Japan
JFC-Micro accepted seven staff from SME Bank, Malaysia and held a 5-day seminar. JFC-Micro explained about operations regarding credit analysis in detail through lectures by the department specialized in supporting business start-ups, together with visits to branch offices.
December 15 - 17, 2010
Meeting with Representatives of SME Bank
Representatives of JFC-Micro and PRI visited the bank's Head Quarter (in KL) and branch (in Melaka) to discuss the progress of the project. During the discussions, SME Bank reported their achievement of improving credit analysis procedure including introduction of new credit analysis format, which is newly produced based on JFC-Micro's analysis method specialized for MSEs.
June 20 - 22, 2011
Final Evaluation
Representatives of JFC-Micro and PRI visited the bank's headquarters (in KL) to evaluate the project, and confirmed that the bank has achieved a certain result on the project. All parties agreed to compile final evaluation on the project.
Voice from Foreign Financial Institutions
Ms. Zarina Nor Binti Ismail, Assistant Vice President / Head Credit Operations 1, SME Bank, Malaysia (Participated in Seminar in Japan,)
Recently, 7 participants from SME Bank of Malaysia (SME Bank) attended the seminar held at the JFC-Micro Training Institute in Tokyo, Japan sponsored by the Policy Research Institute, MOF, Japan (PRI). This seminar is part of the programs organized under the technical cooperation between JFC-Micro, PRI and SME Bank. Essentially, the main objective of the technical cooperation is to improve SME Bank's credit analysis methods for micro and small enterprises (MSEs) and startups, including shortening the turnaround time. The 5-day seminar was to give an in-depth understanding to the Malaysian team particularly to finance start-ups (from both theoretical and practical aspects), to observe and understand the credit analysis process at JFC-Micro branches, to learn other infrastructures available to support credit analysis (namely organization structure in JFC, credit risk management and the management and utilization of information in JFC-Micro). The seminar provided insights into the best practices in evaluating start-ups as well as other credit infrastructures available at JFC-Micro. The systematic and structured training module for credit analysts are also critical to ensure the staff are well trained and equipped with necessary knowledge in conducting credit analysis. (at the branches) We noticed there is an efficient and smooth process flow from receipt of applications to loan processing, decision-making to issuance of contract documents. We believe the intended objective of the seminar has been achieved. Nonetheless, we foresee positive results in the long run especially with continuous support and assistance by PRI, and JFC-Micro team of experts.