MDV aims to cut net non-performing financing rate to 4% in 2019
KUALA LUMPUR (Jan 24): Malaysia Debt Ventures Bhd (MDV) is aiming to cut its net non-performing financing (NPF) rate to 4% for the financial year ending Dec 31, 2019 (FY19) from 9% last year as the technology financier undertakes a transformation plan under its five-year business strategy.
MDV’s newly-appointed non-executive chairman Datuk Seri Lee Kah Choon said the gross NPF in 2018 stood at 24%, which is expected to be lowered to 14% this year as the group further improves its lending processes.
While the NPF rate may be higher than traditional banks, he explained that this is because MDV provides financing to new technology firms, which come with an elevated level of risk.
“We are funding new technology, so invariably the risk is higher and the default rate is always a concern. In response, we are strengthening our capacity in project analysis and ensuring that the project gets implemented on the ground,” Lee told a media briefing today.
While the default rate may be relatively high, MDV chief executive officer Nizam Mohamed Nadzri pointed out that the group also has a high recovery rate of about 80%.
“From MDV’s experience, this has been quite high. This has enabled MDV to repay all its loans, all the sukuk or govt loans that we have received to the last dollar. We kept up all the payments and are able to meet all our commitments,” he said.
For 2018, MDV disbursed total financing of RM1.31 billion in various technological sectors, with renewable energy accounting for the biggest chunk of lending at RM448.69 million.
Lee assumed his current post on Dec 13 last year, replacing Tan Sri Zarinah Anwar, whose tenure ended in July 2018.