KUALA LUMPUR: The inclusion of Halal-in-One Programme - a new and complete halal business support programme, is expected to drive further the scalability of Alliance Islamic Bank Bhd's (AIB) small and medium enterprise (SME) financing portfolio this year onwards.
AIB chief executive officer Rizal IL-Ehzan Fadil Azim said the Halal-in-One program - designed specifically to help SMEs tap into and succeed in the halal market, will further compliment AIS' SME loan portfolio of approximately RM2 billion.
"SME financing comprises 20 per cent of our financing portfolio and continues to be a core focus of our growth strategy in the coming years.
"Our 17.7 per cent growth in SME financing (year-on-year as at September 2019) is driven by our various SME financing programs.
"Moving forward, we expect the Halal-in-One to further drive the growth in our SME portfolio," he told The New Straits Times.
AIB, the wholly-owned subsidiary and Islamic banking arm of Alliance Bank Malaysia Bhd, launched Halal-in-One in January 2020 with a strategic partner HQC Commerce Sdn Bhd (HCSB).
The programme is aimed to provide assistance for SMEs to succeed in the halal market in 3 main areas - halal certification support, business matching and halal funding support.
In the 3 areas, the Halal-in-One encompassed halal readiness analysis, audits, human capacity development, business to consumer (B2C) via e-marketplace, business to business (B2B) and financing for certification costs, premises renovation and working capital to name a few.
AIB’s Halal-in-One program is focused on SMEs in domestic food and beverage (F&B), cosmetics and pharmaceuticals.
Touching on strategies in helping domestic SMEs with halal advisory and financing solutions, Rizal said AIB's goal is to address a key disconnect between Malaysian SMEs and the halal market.
He said despite a lucrative and growing halal market in Malaysia and worldwide, only 10 percent of Malaysian SMEs are halal-certified.
"Our view is that there are three key areas that impede SME participation in the halal economy at a larger scale namely, lack of awareness of halal opportunities and certification requirements, lack of readiness of business to comply with halal certification requirements and lack of resources to tap into available halal opportunities," he said.
When asked on other strategic partner apart from HCSB the bank plan to collaborate with in the future to expand this halal enterprise ecosystem, Rizal the types of partners that AIB is keen to collaborate with will vary in their fields of expertise in order to create a complete halal enterprise ecosystem that works.
"Their expertise can range from human resource solutions and training, accounting and Halal payment gateway, to crowd funding or other modes of certification including those using block chain and artificial intelligence (AI) technology.
"Our focus is to expand our network with the right strategic partners who can help our SME customers, to capitalise on the opportunities in the halal segment. We expect to expand the list to be one that is comprehensive and meaningful for our business owners," he said.
On the impact of Coronavirus (COVID-19) Rizal said AIB is monitoring the situation and do not expect the SME sectors AIB is targeting to be less inclined to pursue halal businesses in light of the situation.
AIB said its customers have limited exposure to China supply chains.
"As it stands, we are already processing more than 2,000 leads for the Halal-in-One programme. We are seeing this as a positive indication of continuing opportunities in this space," he said.
Source: https://www.nst.com.my/business/2020/02/568502/boost-sme-financing-growth