The prolonged credit crunch period brought about by the 1997 Asian crisis has precipitated the need to develop a credit delivery system that could prevent the closure of small- and medium- enterprises (SMEs) that lacked working capital or had severed bank loan facilities.
The more fortunate SMEs that faced opportunities for expansion had to be provided the chance to do so through term-loan funds, which the banking sector could not at that time extend.
A new paradigm was born out of that contemplative phase, simultaneously making for a scheme promoting a gentler learning curve in SME financing.
Local SMEs have difficulty accessing credit from private banks, which often have the wrong notion about them.
The notion that SME lending is not a viable undertaking stems from the banks' lack of information about SMEs.
Banks see the shortcoming of SMEs, but fail to see the value in their potential.
