BANKS extending loans to small- and medium-scale enterprises (SMEs) under the measures introduced in the governments economic package have been urged to ensure the funds are disbursed speedily.
Second Finance Minister Datuk Dr Jamaludin Jarjis said banks delivery systems and procedures should not be an excuse to delay the process of disbursing the loans, meant to turn SMEs into catalysts for growth and domestic investment.
He said the system should be as efficient as possible, with the application process borrower-friendly, and approvals granted within 24 hours where possible.
Jamaludin, who was speaking to reporters after meeting representatives from 15 bodies and organisations representing various SMEs in Putrajaya yesterday, said the government was anxious the funds provided under the various schemes reach the businesses that needed them as quickly as possible.
In the package announced last week, the government had earmarked over RM2bil for SMEs including RM1.5bil under a micro-credit programme to be funnelled through various intermediaries, among them Bank Pertanian Malaysia, Bank Pembangunan, Bank Industri and Bank Simpanan Nasional.
Jamaludin said his ministry was actively monitoring the progress of these measures, and a committee had been established to ensure that the four banks properly implemented the disbursement of the funds.
The banks will have to submit weekly reports to the finance ministry on the total number of applications for these loans and the number of approvals. These reports will then be tabled to the cabinet, he said.
Jamaludin added that as these loans were meant for small businesses, they had to be easily understood by the potential borrowers. He said that once the banks understood the business case for the loans, and studied the cash-flow forecasts, the funds should be dispensed without delay.
I appeal to the banks to make the applications easier, faster and more understandable, he said.
At an earlier function in Kuala Lumpur, Bank Pertanian which has an allocation of RM700mil under the micro-credit scheme said all its branches nationwide would begin to accept loan applications under the scheme from next Tuesday.
Jamaludin said Bank Pertanian had received RM200mil to be disbursed as loans under the scheme. This is expected to last it for the next six months. After that, the finance ministry would arrange further funding for the bank via bonds to be issued by Bank Pertanian and guaranteed by the government.
Under the economic package, RM500mil of the micro-credit scheme is placed directly under Bank Pertanian, and RM200mil under the Amanah Ikhtiar Malaysia fund, which the bank also manages.
Jamaludin said applicants under the scheme would be allowed to borrow up to RM20,000 although the bank had the discretion to revise this upwards in certain special cases to RM50,000.
He said the scheme allowed easier access to funds; and in this particular case, the need to provide collateral is abolished.
A borrower could opt for the conventional scheme, where he would be charged interest of 4% per year, or choose the syariah-based scheme, he said.