What credit appetite is, why no bank publishes it, and where it sits sector by sector based on what comes back from our submissions.
Two businesses with near identical accounts can put the same application to the same bank six months apart and get different answers. Nothing about the second one was worse. What changed was the bank’s appetite, and appetite is the part of the process that nobody publishes.
Every bank has a credit policy. That is the written rulebook: minimum trading history, acceptable sectors, security requirements, the debt service ratios it will work to. It changes slowly, and most of it is roughly what you would expect.
Appetite sits on top of the policy. It is how willing the bank is, right now, to use the room the policy allows. A bank can decline a file that fits its policy perfectly because it already holds more exposure to that sector than it wants this quarter, because a portfolio review has flagged rising arrears in that line of business, because the segment has hit its target for the year, or because credit officers have been told to be harder on new names until the position settles.
None of that appears in your file. The decline letter says something general about not meeting current criteria. The actual reason is rarely the one the letter names, and it is often not about you at all.
Banks do not publish appetite, and there are sound reasons for that. A public statement that a bank has gone cold on a sector would be read as a signal about the sector, would upset the customers already in it, and would be out of date within a quarter. Internally it is often not written down as a single statement either. It shows up as a tightened ratio here, a stricter view on security there, a slower turnaround on files from one industry.
Bank Negara publishes aggregate banking system statistics, and those are genuinely useful for direction of travel. What they cannot tell you is whether a particular bank is currently taking on new food and beverage names with two years of accounts and no property to pledge. The only people who see that are the ones putting files to several banks at once and comparing what comes back.
Owners get two things wrong about appetite, and both are about time.
The first is reading a decline as a verdict on the business. A decline from a bank that was closed to your sector that quarter is information about the bank. It is not a credit score. The same file, prepared the same way, can be workable at a different bank in the same month. Comparing how lenders differ is the whole point of the bank comparison page.
The second is reading a decline as permanent. Appetite cycles. A bank that stopped taking new construction subcontractor names in the first quarter may be actively looking for them by the third, because its exposure has run off or because a new product has a target attached to it. A decline in March does not mean a decline in September. That misunderstanding quietly stops businesses from applying for years longer than they needed to.
The honest other side: sometimes a decline is about the business and not the bank. If the accounts will not support the instalment, or the current account shows persistent excesses and returned cheques, no shift in appetite fixes that. Our guide to why banks decline SME applications separates the two, and it is worth reading before assuming a resubmission elsewhere will land differently.
The position below describes what we are seeing across submissions, not what any bank has stated. Read the third column rather than the arrow in the second; the detail is where the useful part is.
| Sector | Position this quarter | What that looks like in practice |
|---|---|---|
| Manufacturing | current position: open, selective or tight | what banks are asking for in this sector right now, and what is getting declined |
| Construction and civil subcontracting | current position | practical detail, e.g. treatment of contract-backed applications, retention sums, main contractor concentration |
| Wholesale and distribution | current position | practical detail, e.g. stock turn and debtor ageing expectations |
| Food and beverage outlets | current position | practical detail, e.g. minimum trading history, treatment of multiple outlets, tenancy length |
| Logistics, haulage and warehousing | current position | practical detail, e.g. treatment of vehicle fleets and existing hire purchase commitments |
| Professional and business services | current position | practical detail, e.g. unsecured appetite, reliance on directors’ records |
| Retail trade | current position | practical detail |
| Oil, gas and energy services | current position | practical detail, e.g. sensitivity to client concentration and contract tenure |
| Agriculture and agrofood | current position | practical detail, including any scheme-linked appetite |
Sectors not listed above are usually not absent because banks dislike them. They are absent because we have not put enough files through in that sector this quarter to say anything worth saying. Optional line naming any sector deliberately excluded this quarter and why.
Where a scheme sits behind any of the above, the eligibility rules are separate from the bank’s own view and are covered in our note on BNM SME financing schemes. Pricing movements are a different question again, and are dealt with in what the OPR means for your borrowing costs.
Policy tells you whether a bank could lend to a business like yours. Appetite tells you whether it currently wants to. Only the first is written down, and only the second explains why the same file gets two different answers in the same year.
This page is built from one thing: what comes back on the applications we prepare and submit to banks and development financial institutions on behalf of clients. Approvals, declines, the conditions attached to approvals, the questions credit officers ask before deciding, and how long each takes. Over a quarter that produces a usable picture of where the doors are open.
It is not a survey, and it should not be read as one. Four limitations matter.
We have no commercial relationship with any bank and are paid a success fee by the client only, so there is nothing steering this page towards or away from any particular lender. What it cannot do is predict a decision. No view of appetite makes an application likely to be approved, and nobody should treat a green column here as a reason to expect an approval.
The practical value of a quarterly view is knowing when a closed door has reopened, and knowing which door to try next rather than resubmitting to the same bank out of habit. If you were declined more than a sensible interval, e.g. six months ago, both the bank’s position and your own accounts have probably moved.
Start with what caused the decline, because appetite only helps once the file itself stands up. The eligibility self-check covers the ground a credit officer looks at first, and sector-specific structures such as those used for contractors and construction businesses often matter more than which bank is currently open. If you want the current position for your own sector rather than the summary above, ask us.
Because it is rarely framed that way internally, and because saying it publicly creates problems. A bank that announced it had gone cold on a sector would be signalling something about that sector to the market and to its existing customers in it, and the position may well reverse within a quarter.
What you get instead is a general decline reason. It is not dishonest so much as uninformative, which is why the pattern only becomes visible to someone submitting across several banks at once.
It is reviewed every quarter, and the as-at date at the top of the sector table tells you which quarter you are reading. If that date is more than one quarter old, treat the sector positions as historical rather than current.
The explanatory sections change far less often, because how appetite works does not change much. It is the positions that move.
Sometimes, and it depends entirely on why the decline happened. If it was driven by the bank’s own exposure or a sector position at the time, that can reverse, and a fresh submission months later is a reasonable thing to consider. If it was driven by your accounts, your account conduct or your CCRIS record, going back before anything has changed produces the same answer.
The useful first step is establishing which of the two it was, because the decline letter usually will not say.
No. It is based on the outcomes of applications we have prepared and submitted for clients, including the conditions attached to approvals and the questions asked before a decision. No bank contributes to it or reviews it.
That makes it more concrete than a survey about intentions, and less representative than one. It reflects the files we see, which are weighted towards businesses that came to an adviser rather than going direct.
If you want to work out what this means for your own application rather than in general, that is what the first conversation is for. It costs nothing and we will tell you if the answer is that you are not ready.
How a Bank Negara rate decision reaches your facility, what it changes, what it does not, and how to work out the effect yourself.
The six reasons credit officers actually decline SME files, whether each one can be fixed, and roughly how long fixing it takes.
Progress claims, retention and performance bonds make a contractor’s accounts hard to read. What Malaysian banks look for, and how to present a lumpy account.