CIMB Wants A Bigger Bite Of Singapore SME Banking Share
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CIMB 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.
One of the lender’s efforts to do so is the launch of its Asean-China Halal Corridor initiative last year, which is a trade network linking halal businesses across China and the region. The initiative – which encompasses agribusiness, cosmetics, food and beverage, fashion and pharmaceuticals – has seen a growing interest among SMEs here, with strong participation in a recent CIMB halal corridor workshop.
Among the segments that we see (venturing abroad), 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. Along the process of aiding F&B companies to obtain halal certification, the bank found that this group of SMEs usually proceeds to obtain Islamic financing to tap potential Muslim investors, giving a lift to its SME banking segment.
Since 2014, the Malaysia-headquartered bank has seen a take-up rate among SMEs for Islamic financing grow by more than 48 percent per annum in the past five years.
Besides tapping on Islamic finance, the bank recently refreshed its current account offering for businesses, also known as CIMB BusinessGo (BizGo), to provide a unique offering.
“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.”
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.
New features 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 shout out to the market that we want to grow our SME segment and help our clients to expand their businesses into ASEAN.
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 bank arena, what customer pain points are you trying to solve? That’s very key as it goes back to basics. If those basics can be achieved without going digital, then what do you really want to achieve? he asked.
Questions & Answers
Q.Which of CIMB's initiatives has shown strong SME interest for cross-border trade?
Which of CIMB's initiatives has shown strong SME interest for cross-border trade?
The Asean-China Halal Corridor initiative, launched last year, has generated growing interest among SMEs. It is a trade network linking halal businesses across China and the region, particularly in F&B and agriculture.
Q.What is the primary objective behind the recent refresh of CIMB's current account offering, BizGo?
What is the primary objective behind the recent refresh of CIMB's current account offering, BizGo?
The new BizGo bundle aims to address SMEs' market needs not currently met by other banks. It also coincides with CIMB's 10-year anniversary in Singapore and supports the growth of its SME segment.
Q.What percentage growth has CIMB seen in the take-up rate for Islamic financing among SMEs since 2014?
What percentage growth has CIMB seen in the take-up rate for Islamic financing among SMEs since 2014?
Since 2014, the bank has observed that the take-up rate for Islamic financing among SMEs has grown by more than 48 percent per annum. This trend has been consistent over the past five years.
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