Further details have emerged on Malaysian state-owned secondary mortgage company Cagamas' decision to mandate two separate deals backed by SME loans (see ASR 6/20/05). The loans are not actually originated by Cagamas, but by OCBC - working with Deutsche Bank on one deal - and Maybank, the parent of Aseambankers, who is arranging the other transaction with Citigroup Global Markets. Cagamas' involvement, sources report, is limited to paying fees to the arrangers.
The Malaysian government is believed to be the driving force behind both deals, part of a broader plan to encourage banks to finance expanding SME loan books through securitization. To this end, the government introduced a scheme last December whereby banks receive subsidies for lending to SMEs. Maybank is already the biggest SME lender with a portfolio worth M$21 billion ($5.5 billion) at the end of 2004.
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