Timely for S’wak-owned bank to address local needs, says Sheda advisor

KUCHING (Sept 26): The new Sarawak-owned bank will play a pivotal role in supporting the local housing industry and address home financing needs, said Sarawak Housing Estate Developers Association (Sheda) advisor Dato Sim Kiang Chiok.

Sim deemed the state government’s move in taking over majority stakes in a commercial bank as a ‘promising’ one to spur local businesses and the housing industry, while offering advantages that cater to the state’s economic and development needs.

“Since the 1998 national currency crisis, all Sarawakian banks have merged with Malayan banks, reducing the number of banks in Malaysia to about ten major institutions,” he said in a statement yesterday.

He added such consolidation was meant to enhance the resilience of banks against future economic downturn, but often left local businesses neglected.

“The centralised decision-making in Kuala Lumpur has often left our local businesses neglected, as lending in Peninsular Malaysia tends to be more profitable,” he pointed out.

Among the issues, he said, were on housing loans’ approval process and disbursement of funds.

“Housing loans can typically be approved quickly if applicants meet the necessary criteria; however, the disbursement of funds may take up to three months post-approval due to documentation processes.

“Each bank’s loan approval processes vary, often centralised at their headquarters in Kuala Lumpur or divided between East and West Malaysia, leading to limited approval capacity at regional branches.

“As a developer, our financial needs differ from those of larger banks; we require more flexible financial solutions and longer payback periods, and therefore, we hope this new local bank will meet our needs.”

For Sarawak to achieve its Post Covid-19 Development Strategy 2030 and beyond, Sim said the state-owned bank has to provide financial solutions that facilitate progress towards becoming a developed state.

“This includes offering quicker approvals and realistic lending conditions that reflect our unique circumstances,” he said.

As all banks in Malaysia are regulated by Bank Negara, he suggested that the Sarawak-owned bank be more attuned to the local lending requirements, whether for end financing of housing purchases or bridging loans for developers.