CIMB Bank plans to double its market share from 3 percent to 6 percent by 2021 for its small- and medium-sized enterprise (SME) banking business in Singapore.
One of the lender’s efforts to do so is the launch of its Asean-China Halal Corridor initiative last year, which is a trade network linking halal businesses across China and the region. The initiative – which encompasses agribusiness, cosmetics, food and beverage, fashion and pharmaceuticals – has seen a growing interest among SMEs here, with strong participation in a recent CIMB halal corridor workshop.
Among the segments that we see (venturing abroad), a lot of cross-border SME regional flows are manufacturing and trade, F&B (food and beverage) including the halal market, and the agricultural commodity sector, said Yong Jiunn Run, head of CIMB commercial banking.
China’s halal sector is expected to reach $1.9 trillion by 2021, and there is a potential customer base of 266 million in ASEAN and China. Along the process of aiding F&B companies to obtain halal certification, the bank found that this group of SMEs usually proceeds to obtain Islamic financing to tap potential Muslim investors, giving a lift to its SME banking segment.
Since 2014, the Malaysia-headquartered bank has seen a take-up rate among SMEs for Islamic financing grow by more than 48 percent per annum in the past five years.