RM300m micro-credit scheme abused, says Ng


By LAM LI
  • Nation
  • Monday, 04 Aug 2003

BY LAM LI

PETALING JAYA: The RM300 million micro-credit scheme has been abused with unscrupulous people selling application forms for hundreds of ringgit and charging consultation fees in the thousands as well. 

Deputy Finance Minister Datuk Dr Ng Yen Yen said there were also complaints that some people had borrowed the money, which is disbursed through Bank Simpanan Nasional, to use as capital for loan-shark businesses. 

She said the abuses were discovered during the nationwide roadshows held by the bank and various associations to promote the scheme.  

“We are investigating the reports but many complaints lack substantial evidence. We have yet to bring any of the cases to the court. 

POSITIVE FEEDBACK:Dr Ng and some of the 60 women taking part in a micro-credit mentoringtraining workshop giving the thumbs up to the scheme in Petaling Jaya yesterday.

“We have also noticed advertisements in the newspapers of “authorised individuals” offering their services to help interested borrowers to obtain the loan. This is not the right way to promote the scheme,” she said after opening a micro-credit mentoring training workshop here yesterday.  

“We are monitoring the situation closely to identify abuses and if any mentors are found to be irresponsible, they will be removed,” Dr Ng said. 

The loan facilities was introduced in late May under the economic stimulus package to help small businesses and individuals interested in venturing into petty trade. 

The maximum loan allowed is RM20,000 at an interest of four percent.  

It is the first loan scheme that waived the requirement of collateral or guarantors.  

Instead, the mentor system – whereby a credible individual attached to an association that signed a memorandum of understanding with BSN acts as the middleman – was begun. 

The registered mentors are responsible for identifying, screening and coaching potential borrowers to prepare accounting documents and business proposals before they are vetted by BSN. 

The mentors, entitled to RM200 from BSN for each loan approved and another RM200 when a loan has been repaid in full, are required to check on the business progress of their borrowers throughout the loan servicing period ranging from one to five years. 

The micro-credit scheme was first lobbied for by women groups a few years ago following the success of its implementation in Bangladesh in helping women become self-reliant by providing them US$500 (RM1,900) loans to venture into the cottage industry. 

Dr Ng said the scheme in Malaysia had been modified and opened to all races and genders based on their need and ability to service the loan. 

“This is a good scheme and a pilot project. We must ensure it works to give unqualified commercial borrowers a chance to fund their plan to make a difference in life. 

“This is a scheme that can help to upgrade the capacity of petty traders, who will learn how to prepare business proposals and accounts and hopefully in the future, they will grow into qualified commercial borrowers,” she said, adding that as of late last month, about RM50mil in loans had been approved under the scheme.  

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