| Danial Norjidi |
BRUNEI Shell Petroleum Company Sdn Bhd (BSP), Bank Islam Brunei Darussalam (BIBD) and Baiduri Bank yesterday launched the BSP Credit Facility Program – a programme that will allow current and future local contractors of BSP who meet the programme’s criteria to get fast track service in the reviewing and decision process of their respective credit applications.
A signing ceremony and launching for the programme was held at the Indera Kayangan Ballroom, The Empire Hotel & Country Club.
Dato Paduka Awang Haji Matsatejo bin Sokiaw, the Deputy Minister of Energy and Industry, was present to witness the ceremony.
The agreement was signed by Dr Ceri M Powell, the Managing Director of BSP; Mubashar Khokhar, the Managing Director and Chief Executive Officer of BIBD; and Ti Eng Hui, the Deputy Chief Executive Officer of Baiduri Bank.
The agreement, which is in the form of a Statement of Joint Commitment, formalises the mutual interaction and strengthens the relationship between BSP and the two banks.
According to a statement at the programme launch, BSP, BIBD and Baiduri Bank are committed to contributing to the growth of Brunei’s economy in line with the long-term objectives of the government under Brunei Vision 2035, whereby the three will jointly work to facilitate financing to local businesses under the terms of the BSP Credit Facility Program.
A BSP press release, meanwhile, stated that the programme will operate for the benefit of the current and future local contractors of BSP who satisfy the programme’s criteria, fast-tracking the reviewing and decision arrival process for their respective credit applications.
In her welcoming remarks, BSP Managing Director Dr Powell expressed her appreciation for the proud initiative made by BSP in collaboration with BIBD and Baiduri Bank.
“This BSP Credit Facility Program is one of [BSP’s] many initiatives to support the growth of local businesses,” said Dr Powell. “I am confident we will be jointly successful and I am grateful to our partner banks BIBD and Baiduri Bank today as they have subscribed to our joint BSP Credit Facility Program. I look forward to the implementation and success of the programme.”
Also giving a speech at the event was Rob Van Velden, BSP’s Finance Director. Van Velden highlighted that the key driver behind the programme was the desire to see improvements in ease of doing business with regard to local companies executing contracts for BSP.
“More often than not financing is required to enable the execution of BSP contracts by local businesses,” he said.
“Under the credit facility program, BSP, Baiduri Bank and BIBD believe that we can deliver credit to local businesses faster and cheaper than today and more robustly by working more closely together on the cash flow forecast that a contract will deliver to the business partner.”
He affirmed that this additional clarity which will come as a result of BSP joining the credit conversation reduces the credit risk for the banks and will allow them to work faster and cheaper with business partners.
“In addition BSP will drop for eligible contracts the ‘termination for convenience’ clause,” he continued.
“This means that for contracts under the programme we are more confident that we will want to see them through to the end of the contract, and this additional certainty in turn creates confidence with the banks which [means they will be more ready to] deploy more favourable credit terms.”
Van Velden added, “Obviously, banks remain banks and will have to run their own credit risk assessment processes and take decisions accordingly and the banks will also continue to require assignment of contract proceeds as long as there is a debt situation which is reasonable, and we will accommodate this as good as we can in close cooperation with the business partner.
“All this in my view is good news for business partners, the banks and BSP and will make our business easier to execute.”
Speaking to the Bulletin yesterday, Hajah Rosita binti Haji Hassan, the Head of Supply Chain Management at the BSP, explained further on the BSP Credit Facility Program.
“This is a programme which will help local companies get easier access to financing. There is already a pre-agreed template between the banks and BSP and between BSP and the business partners. Therefore it will be easier access [to financing], and it will take a shorter time to get approval, and also the best thing is that the rates will be more attractive than perhaps if the business partners go to the bank themselves,” she said.
Hajah Rosita added that the financing process will be based on the contracts that BSP has with its business partners.
“So between BSP and the business partners, we have the contract, and within the contract, we encourage them to go for local financing, [in this case at] BIBD and Baiduri Bank. Between the banks and the business partners, of course they will have their own agreement, and between the banks and us, the Memorandum of Understanding,” she shared.
“It’s a win-win situation for everyone. For us, we will see our business partners, their cash management will be much better and they can start the work much faster, and they can mobilise the activities easier. For the banks, they get customers, and for the business partners, they get approval faster and cheaper.”
The launch concluded with a tour of booths set up by BSP’s Supply Chain Management (SCM) team, BIBD and Baiduri Bank.
Among those present at yesterday’s event were senior government officials, bank representatives, BSP leaders, and representatives from over 100 companies registered as BSP vendors.