CIMB Bank To Offer Microcredit Loans Via Post Offices

from Bernama

CIMB Bank expects to disburse RM50 million in microcredit loans and 30,000 credit cards under its collaboration with Pos Malaysia this year.

The two parties Tuesday signed an agreement for the distribution of selected banking products through post offices nationwide.

The agreement was signed between CIMB Bank's executive director Tunku Ahmad Burhanuddin and Pos Malaysia & Services Holdings Bhd's executive director and group chief operating officer Datuk Abu Huraira Abu Yazid.

Under the collaboration, CIMB Bank will be the first consumer bank to offer credit card and personal banking products through Pos Malaysia.

As a start, the post offices will distribute the bank's Xpress Cash microcredit loans and credit cards.

A pilot project will be initiated at 20 post offices from March 19, 2007, followed by a nationwide roll-out involving Pos Malaysia's 669 branches later in the year.

CIMB Group's chief executive officer Datuk Nazir Razak said Pos Malaysia's large distribution reach through 669 post offices would complement CIMB Bank's network of over 380 branches to reach more customers nationwide.

He said the bank's Xpress Cash is a microcredit loan for lower income individuals and businesses, including those with a monthly income of as low as RM800.

The loan, with a monthly interest ranging from two to three percent, will take 10 to 14 days to process.

"Through microcredit loans, we are in fact helping people to help themselves by accessing in a safe, regulated environment, at a lower cost than the informal sector," Nazir told reporters after witnessing the signing of the CIMB Bank-Pos Malaysia agreement.

He said CIMB Bank expects demand for its microcredit loans to double this year to RM550 million from RM275 million currently.

"It is the single fastest segment of our loans book where it grew from RM50 million to RM250 million last year," he added.

Nazir said in addition to microcredit loans, the first phase of the bank's partnership with Pos Malaysia also entailed the distribution of credit cards through post offices.

"Today, our credit card operations have a market share of 10 percent of credit card receivables while we account for nine percent of credit cards issued, ranking fourth in the market," he said.

"Our issuing capabilities are well complemented by our ties to merchants, As acquirers, we process 16 percent of credit card sales volume, and are ranked second in the market," he added.

Meanwhile, Abu Huraira said with more than 175 years of experience in connecting Malaysians as well as its extensive network of retail outlets across the country, Pos Malaysia occupied a position of trust in the community.

He said the strategic cooperation between the two government-linked companies would benefit not only their respective stakeholders but also the public.