SME financing has never been easy and we often hear about business loan applications being rejected by a bank. Although there is an alternative financing option for SMEs, a business loan from a financial institution is still the first choice for many local business owners.
So, what is the real approval rate for SME financing in Malaysia? We found the “Key Statistics on SME Financing and Pembiayaan Mikro by Financial Institutions” on the website of Bank Negara Malaysia. We extracted and summarized the approval rate for SME financing by sector. See the infographic below.
Average approval rate for SME financing
The average approval rate for SME financing is 33.4%, but it varies by sector. According to the data, the rate for the construction and household sector can be up to 50% or higher. However, note that the sector is not the only factor that determines the approval rate. A company’s credit score and its financial strength and background are both core factors in any loan application and that’s where most of the SMEs failed.
Almost 7 out of 10 loan applications go down the drain and then what other financing options are there for the businesses? Invoice financing can be one of the best options for them. An invoice financing marketplace like LendingStar doesn’t require a credit score or financial record check and no documentation is needed to register. A business owner can sell invoices and receivable invoices for instant cash. This can help the business owner to fund their business without committing to a loan debt.
There is more data available on the approval rate for SME financing. Check out the BNM link here for more info.
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*Data above are extracted and summarize by non-financial professional personnel. This article purely is for reading and sharing purpose, LendingStar Sdn. Bhd. will not responsible for any wrong data interpretation.