SME Factors Sdn Bhd (SMEF), a factoring company targeting government contractors and suppliers, expects to grow its business to about 5,000 customers and over RM1 billion facilities by year-end. Privately-held SMEF is banking units factoring products and the opportunities from the RM30 billion budget under the 10th Malaysia Plan (2011-2015) and the Economic Transformation Programme to achieve its target. Factoring is where a business sells its accounts receivables, or invoices, to a third party (called a factor) at a discount, in exchange for immediate money to finance ongoing business.
SMEF managing director Syed Zed Al Qudsy said the development programmes, which involve the government, government-linked companies (GLCs) and large private entities, will filter down small and medium enterprises (SMEs). "There are abundant opportunities in the SME industry, it is a matter of identifying the viable ones and keeping the risks low," he told a news conference in Kuala Lumpur yesterday. SMEF now has over 500 clients with over RM250 million facilities offered to them. It plans to expand its product reach to customers servicing the private sector in the second half of the year. "We are currently in talks with a number of financial institutions and we should be able to announce the partnerships in the next few months," he said.
SMEF has partnered with Malaysia Building Society Bhd (MBSB) under the Ekpres Tunai SME programme, to disburse a total of RM500 million financing backed by MBSB to SME contractors servicing the govern ment and GLCs. Syed Zed said the company's competitive edge lies in its creative factoring products , high approval rate, fast approval process, speedy disbursement and flexible terms. "Our approval rate is 90 per cent,"he said. Being a contractor before , Syed Zed said he understands well the needs and challenges faced by contractors and SMEs.
Source: New Straits Times, 26th January 2011
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