KUALA LUMPUR (Nov 11): Credit Guarantee Corp Malaysia Bhd (CGC) is collaborating with Affin Bank Bhd to provide RM50 million worth of loan guarantee to small and medium enterprises (SMEs).

The portfolio guarantee (PG) aims to further promote financing accessibility to SMEs, CGC President and Chief Executive Officer Datuk Wan Azhar Wan Ahmad said.

"We are happy to note that our PG partnership will enable SMEs to gain quicker access to financing, with speedier turnaround time in terms of approval and disbursement of loans as the applications are evaluated based on a pre-determined and simplified sets of criteria for loan eligibility," Wan Azhar said.

He was speaking to reporters at the PG agreement signing ceremony between CGC and Affin Bank here today.

Around 170 SMEs are expected to benefit from the PG's first phase, according to him.

Wan Azhar said the PG was expected to benefit SMEs in construction and wholsesale sectors, which might face financial access difficulty.

CGC's guarantee is available for a maximum of seven years, following approval. Wan Azhar said the scheme involved loans amounting from RM100,000 to RM500,000.

This rate is dependent on the borrower's credit rating and Affin's credit evaluation standards.

Affin Bank Executive Director Amirudin Abdul Halim said the PG brought Affin's long-standing relationship with CGC to a "more serious level".

He said the PG was in line with Affin's efforts to focus more on SMEs. SME currently contributes almost 20% of the bank's total gross loans.

CGC's non-performing loans (NPL) have decreased. Wan Azhar said CGC's net NPL stood at 4.4% in 2010, and was at 3.1% in 2014.

He said he was happy that the number was at 3%, as it showed there were "problematic and healthy borrowers".

"Three percent is a fair and nice figure...if NPL is too low, (it shows) that the lending criteria is too tight," he said.