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30 March 2010

Japanese agency offers $300m loans to SMEs in SE Asia

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The Japan Bank for International Cooperation (JBIC) will, through regional banking group CIMB Group Holdings Bhd, provide $300 million in long-term financing to small- to mid-sized businesses in Southeast Asia, reported Business Times of Malaysia.

The two parties formalised the arrangement, said to be the largest the Japanese government-run JBIC has ever provided to a commercial institution, in Kuala Lumpur Monday.

The funds are meant to support firms in the region that have Japanese links. Loans will be channelled through CIMB Bank in Malaysia, CIMB Niaga in Indonesia and CIMB Thai. "This is particularly for small- to medium-sized enterprises which continue to face difficulty obtaining long-term financing," JBIC's resident executive officer for Asia and Oceania, Ryuichi Kaga, said at the signing ceremony. Datuk Seri Nazir Razak, CIMB group chief executive, told reporters that the largest loan size for a company is expected to be up to $25 million.

"We believe the facility comes at an opportune time as businesses are looking to expand and as governments gradually phase out pump-priming measures in order for economic growth to be driven by the private sector," he said.

He added that eligible businesses in any sector can start applying for long-term financing at preferential rates, in either domestic or foreign currencies.

Nazir believes that two-thirds of the funds may flow into Indonesia given the current favourable rates and the country's strong growth outlook.

JBIC is the international arm of Japan Finance Corp, a policy-based financial institution in Japan.

"Through CIMB Group's position as the leading universal bank in the Asean region, JBIC will expand its access and offer its facilities, albeit indirectly, to local companies throughout the region," Kaga said.

There are more than 1,400 Japanese companies operating in Malaysia and about 10,000 Japanese living here, according to the Japanese Ambassador to Malaysia, Masahiko Horie, who witnessed the signing Monday.


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