Your Digital Move – Business Funding

MRCA Event

Your Digital Move - Business & Funding

MRCA hosted a webinar to keep retailers informed on obtaining funding through the right channels and how to digitalise their businesses.

T

he webinar, which was moderated by Stan Singh, Secretary-General of MRCA, featured two distinguished speakers – Nicholas Tan, Senior Director of SME and Enterprise Development, Fusionex Group, and Chin Kah Leong, Head of Regional Business Development for SMEs, RHB Banking Group.

NICHOLAS TAN

To the question of how the pandemic has impacted the consumer, Nicholas cited McKinsey & Company’s study which revealed that consumers have resorted to digital means for consumption. “Digital transformation has taken the world by storm. Telemedicine and virtual appointments increased 10 times, e-commerce achieved 10 years’ traction in 8 weeks, and what Netflix took to build in 7 years, took Disney Plus only 5 months to achieve; 250 million students went online with remote learning in just 2 weeks,” he says. He adds that remote working has increased by 20 times in just 3 months.

Nicholas stresses that any organisation that aspires to move forward has to embrace digitalisation. He explains that Fusionex believes that digital transformation is premised on four key pillars namely, engaging customers, internal collaboration, optimising operations, and changing the way you sell. He reminds retailers that consumer activities are going to take some time to return to normal, therefore digitalising business is a necessity to move forward. He advises retailers to constantly be ready for changes in the business landscape and that retailers should be prepared with digitalisation.

“Don’t forget that with digitalisation, your customers can reach you 24 hours a day, and therefore they expect more from you, and therefore you should be faster, optimise all your operations and change the way you sell,” he stresses. He continues to advise that retailers should leverage on digitalisation to update processes and empower customers to interact with retailers digitally.

Nicholas points out that retailers need to take stock to ascertain where they are in terms of their digital roadmap, evaluate where they are in their digital journey, and to take action by reaching out and starting the journey. He proposes retailers to explore the full suite of digital solutions that Fusionex has to offer to make digitalisation a success in their organisations.

“You have partners like Fusionex and RHB to help you in your digitalisation journey,” he reminds retailers.

To Stan’s questions on retailers who are unaware of where to start, Nicholas explains that many retailers equate digitalisation with just selling online. He shares that retailers have the misconception that having an online store is digitalisation, however the full process involves re-looking at internal processes and engaging talents to run the digital business. He adds that digital business is all-encompassing and goes beyond just buying and selling, because it involves delivery, logistics, after-sales service and customer service. Nicholas also points outs that retailers often think that digitalisation requires large funds, but he explains that in going digital, retailers can start with small steps.

CHIN KAH LEONG

In addressing funding, Chin explains that retailers need to first understand what their options are and what banks are offering them. These include the current 6-month moratorium, Bank Negara Malaysia’s (BNM) repayment

assistance initiatives, and to engage with their respective banks on whether a financial restructure is needed. He advises all SME business owners, “If you are really not sure, do talk to your respective bankers on repayment assistance that is available.”

He highlights that RHB has provided many retailers extended moratorium periods based on their requests to ease their financial burden during these trying times. “It is based on specific justifications provided by the SMEs,” he adds.

In explaining restructuring and rescheduling, Chin says that retailers need to identify whether the current stress is expected to be long-term or just temporary. He adds that retailers should identify their current repayment source and projected cash flow based on current conditions. Based on these findings, Chin advises retailers to discuss with their respective bankers on fresh repayment plans that will effectively match debt repayment against cash generation estimates. This can be achieved through short-term or extended moratoriums, payment rescheduling, step-up repayment plans, and conversion of overdrafts or trade line into term loans with lower monthly repayments, among others.

Chin explains that the targeted relief and recovery fund (TRRF) initiated by BNM is available to all retailers affected by COVID-19 containment measures, spanning various industries such as personal services, F&B, health and social work, arts, entertainment and recreation, wholesale and retail trade, as well as business services. Recipients of the Special Relief Facility and the PENJANA SME Financing are eligible for the TRRF up to an aggregate limit of RM500,000 per SME and up to RM75,000 per micro enterprise.

In highlighting the benefits that RHB offers to SME businessowners, Chin explains that the bank is offering retailers financing amount of up to RM500,000, with a low rate of 1.95% per annum, for a tenure of up to 7 years. Up to 80% of the financing amount will be covered by government guarantee provider, Credit Guarantee Corporation (CGC) and Syarikat Jaminan Pembiayaan Perniagaan (SJPP). In addition to this, RHB offers businessowners the SME e-Solution Ecosystem and the RHB #JomSapot platform with no extra cost for RHB customers.

Chin points out that RHB has an SME e-Solution (SES) package – an integrated business account for SMEs across various segments which can be customised with all the API software encompassing features such as accounting software, HR management system, merchant card terminal/ MPOS, customised insurance, commercial credit card and cloud-based electronic point of sales/ ePOS to manage sales orders, inventory and CRM.

“RHB #JomSapot is an initiative by RHB amidst the pandemic and economic crisis, to help advertise businesses for free for RHB customers. The aim is to support these SMEs to sustain, create more jobs, and to drive rapid economic recovery,” says Chin. He explains that becoming part of this initiative is simple – retailers just need to open an RHB business current account, and RHB will help to promote their business on this platform providing retailers with visibility on various channels.

Chin explains that RHB’s in-house relief financial programme offers retailers financing up to RM1million without asking for a guarantee fee or collateral. Retailers can apply for the RHB in-house financing programmes using the RHB Financing (SME) Mobile app. The bank’s in-house financing programmes cover relief financing for mall tenants; receivable financing for FMCG, pharmaceuticals and F&B; start-up financing for companies established between 1 to 3 years; and, financial supply chain ecosystem financing.

CONCLUSION

On Stan’s question to the quantum of funds disbursed to-date, Chin shares that more than RM1billion was disbursed last year in relief funding to SMEs, with 2,000 applications received online. He explains that SME businessowners need to be able to articulate to bankers their business recovery plans for the future in order to obtain relief financing.

On moving businesses forward for their clients, Nicholas explains that Fusionex will need to explore historical business data, business information and processes to plan for the future.