Small loans go a long way


By K. S. USHA DEVI

WONG Jee Yeng had been using the same machine to produce fresh tofu for the past 20 years, and it was getting a little run down. She really needed a new one that would be more efficient but the problem was she did not have the money to pay for it. 

“I would need to save money for at least another three years before I am able to purchase the machine,” says Wong, 55, a tofu wholesaler who runs her business from rented premises in Sepang, Selangor. 

Then Wong heard about the government's micro credit scheme, and she was encouraged to apply for a RM20,000 loan from Bank Simpanan Nasional (BSN).  

“When I first heard about the scheme through friends, I realised that this would be a good investment for my small business,” says Wong, who is an MCA member. 

Wong: Loan will help buy new machines for tofu business.

“With a repayment time frame of one to five years and a low interest rate of 4%, I would be able to make the payments consistently.” 

Upon the advice of a friend who is also a mentor under the scheme, Wong drew up a cash flow that stated she would be able to make her repayments in monthly instalments. She is now awaiting approval for her application. 

Introduced in May this year by the government to stimulate the domestic economy and encourage growth of entrepreneurs in the country, the micro credit scheme offers an attractive loan package of between RM5,000 and RM20,000 that will be dispensed by BSN for non-agricultural projects and Bank Pertanian Malaysia for agricultural projects. 

(BSN and Bank Pertanian Malaysia have been allocated funds of RM300mil and RM500mil respectively for the scheme.) 

The scheme allows borrowers to pay back the amount they owe on a weekly or monthly basis according to the viability of their cash flow.  

Organisations such as Umno, MCA and MIC, Federation of Women Entrepreneurs, Federation of Traders and Small Businessmen, Federation of Malay Traders and Small Businessmen, Social Strategic Foundation, and Hypermarket Suppliers, among others, have also been roped in to ensure that the loans will be disbursed only to genuine business people. 

Furthermore, a special mentor system was made part and parcel of the scheme to keep an eye on the borrowers. The mentor acts as a “moral guarantor’’ who is willing and capable of mentoring the borrower in his business operations.  

Even though the responsibility of the mentor is heavy, MCA member Shirley Kua, 48, willingly took the role because she wanted to help others who were in need. 

“I am a social worker, and through this I managed to identify the women who needed the micro credit loan for their business,” says Kua. 

Kua: Mentor who is willing to share her business acumen.

An experienced businesswoman with three kindergartens under her belt, Kua is willing to share her expertise in managing a business, and becoming a mentor is her way of doing it. 

“So far, I have two of them who are running their own business. One is running a dhobi shop and the other is in the advertising line.” 

Before she took them under her wing, Kua checked their backgrounds to ensure that they were serious about improving their business.  

“As a mentor, I don’t provide them financial help but the moral obligation is tough. As mentors, we have to oversee the borrowers until their loan is fully paid,” she says, adding that each mentor should have 10 people under their supervision.  

“The dhobi shop owner needs to buy new machines for her business. Coming up with the money was a bit difficult, as she is the sole breadwinner in her family. Her husband is disabled after a stroke and she is also taking care of her mother-in law. She is getting a regular income to help feed the family but this not enough to expand her business. 

“The loan of RM20,000 without collateral will help to ease the burden of buying new machines. She started the business using second hand machines two years ago.” 

Other than overseeing the management aspects, Kua also offers a friendly ear when required. 

The Selangor Wanita MCA has set up a network of mentors who are personally recommended by its chief, Dr Tan Yee Kew. 

“They are all division leaders and are responsible individuals,'' says Dr Tan.  

“I asked them to come forward and many came willingly to help and face the challenge of being mentors.” 

During a recent meeting, Dr Tan briefed the mentors on their role and urged them to be pro-active in carrying out their responsibilities. 

“I have also told them to come back with the first batch of applicants for loans as soon as next week. In order for the system to work, everyone has to play their part.” 

According to Dr Tan, their mentors would know the loan borrowers as they came from the same areas such as Klang or Banting. 

“From these small places, they would know about each other through others or they would have seen one another,” says Dr Tan, who views the scheme as a boon for single mothers. 

“This scheme would help them to set up a small business and gain a regular income.” 

To train businesswomen as mentors and prepare them for their role, the National Association of Women Entrepreneurs of Malaysia (Nawem), an affiliate of the Federation of Women Entrepreneurs Association of Malaysia, has set up a mentoring system that holds training sessions every week.  

“Ideally, a mentor would need to have knowledge, experience and skills that she should pass on to those she is mentoring,” says Bien Mei Nien, president of Nawem. 

“She should be able to pass on skills such as maintaining proper accounts, marketing concepts and business strategy. Mentors would also help those they are mentoring to fill up the forms, explain the scheme to them and access their business viability.” 

Being a mentor is a tough job, Bien says, but despite this, so many Nawem members have come forward to offer their help. 

Dr Tan: Views the scheme as a boon for single mothers.

Overall, Bien says, over 193 applications have been approved by BSN, but most of the borrowers have yet to get the funds.  

“The bank is also very strict on loan approval because they do a thorough credit check on borrowers. People should bear in mind that this is a loan just like any other, except that it is meant for small business ventures. The processing period will take time,” she says. 

“Borrowers need to know that it is to be repaid and is not a charity fund. After all, it is the taxpayers money that is being disbursed.” 

Bien is encouraging more women to take up the offer. 

“Most of us never had this chance so we understand the importance of getting the push start for new, small businesses,” she says. 

“We support the scheme because we know that it can make a difference, especially for single mothers.” 

 

  • Nawem can be contacted at 03-21423325. Its office is in Bangunan Puspanita, Jalan Hose, Kuala Lumpur. 

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