Small to medium sized enterprises (SMEs) in Malaysia represent 98% of business establishments, contributing approximately 40% of gross domestic product (GDP), according to Affin Bank Berhad, which has won the Excellence in SME Banking category for its multi-year work helping start-ups access finance, advice, growth support and so on. This benefits financial inclusion efforts too as it means families, crowdfunding websites, and other sources of start-up funds and advice are no longer the only option.

The Affin Start-up Banking Initiative, as the on-going three-year old project is known, is a holistic proposition for small start-up firms at the lower end of the SME scale that offers differentiated products, on-boarding assistance and a knowledge bank, digital engagement tools and processes, and active meet and greet support to help firms grow their business, and survive the difficult early stages. A start-up ecosystem of mutually supportive firms is acquired and served by a team of Relationship Managers (RMs) formed specifically for the SME start-up segment.

This is the Acquire: stage, which is further supported by the bank’s presence in the government’s Companies Commission of Malaysia (SSM) offices for company registration, which are situated throughout the nation. This means start-ups can be on-boarded via RMs at SSM offices without ever visiting a branch.

The Offer: stage of Affin’s four-ponged approach is to provide specific products and tools for start-ups in the following areas:

  • Transactional: A basic business current account is the first product to on-board for daily transactional purposes, moving money around to suppliers and vice versa. But there is also the SMEssential all-in-one tool that is added later on to make transactions more easily accessible, trackable and convenient. It has received 8,600 sign-ups since summer 2018.
  • Protection: SMEeasy Protect is a business risk insurance product with a low annual premium from 15 Malaysian Ringgit (MYR), equivalent to US$3.60, offering a wide range of cover in case of business and personal mishaps. It has received 3,900 sign-ups since summer 2018.
  • Financing: SMEmerge is for initial working capital financing, a mjor challenge for most start-ups. It has received over 200 registrations since its April 2019 unveiling.

The Value-add stage of Affin’s Start-up Banking Initiative is intended to provide:

  • Advisory & Support Services: These are typified by a Collaboration element that is effectively a networking group and ecosystem where business partners provide business opportunities and can find investable ideas or useful solutions via attending start-ups. The related SMEngage element is a themed trade fair and knowledge-sharing drive, while the SMEcolony tool is a mobile app that offers information and resource recommendations in one easy-to-use convenient place. Its open to the public, SMEs and any interested parties to foster physical collaboration and knowledge-sharing in the virtual, digital world. The app for the Apple App Store was launched this year, joining the Google Play Store version that went live last year.

The Develop stage of Affin’s Start-up Banking Initiative is includes a start-up business competition with potential seed capital reward and external assistance and mentorship opportunities via government agencies, an investors’ forum and venture capitalist gatherings.

The success of the project is proven by the fact that Affin Bank Berhad has had 15,000 start-ups join it since the beginning of the project in 2017, with many more joining as it continues to grow and expand, although Covid-19 has understandably slowed its advance recently. Nonetheless, many of these start-ups will no doubt grow to become larger scale SMEs and perhaps the regional or global multinational corporations (MNCs) of the future. As their needs needs grow the bank will be there to support them, effectively growing its own business.

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