Hardcore defaulters fail to repay a single sen despite lower fee scheme

KUALA LUMPUR: The National Higher Education Fund Corporation (PTPTN) is frustrated that hardcore defaulters continue to snub various measures to make repayment ea­­sier on their pockets.

Even its Syariah-compliant Ujrah loan repayment scheme, introduced seven years ago, has received lukewarm response from bor­rowers, said PTPTN marketing and strategic communications chief Mastura Mohd Khalid.

Only 23% or 257,582 out of the 1.1 million borrowers, who are under the conventional loan repayment scheme prior to the introduction of the Ujrah scheme in 2008, have switched to the Islamic financing scheme.

As of May 31 this year, PTPTN had disbursed study loans worth RM52.2bil to 2.3 million people.

The Ujrah scheme was introduced to encourage borrowers to settle their outstanding loans faster at a lower fee.

While the conventional scheme charges an administrative fee ran­ging from 3% to 5% per annum on the reducing balance, the Ujrah scheme charges a flat fixed rate of 1% per annum.

“I’m not sure why not many borrowers are switching to the Ujrah scheme. I don’t know if it is because not many are aware of it or they just don’t want to change their loan agreement.

“If you look carefully, many of them are hardcore defaulters who have not even made a single repayment to PTPTN. They couldn’t care less what happens to their loan accounts,” said Mastura.

She added that the low conventional to Ujrah conversion rate could also be due to the perception that it entailed a cumbersome process.

She pointed out that the Ujrah scheme allowed borrowers to make an estimated 50% saving on the administrative fee.

“Under the Ujrah scheme, a flat fixed rate of 1% is charged on the borrower’s outstanding balance.

“For example, if the principal loan amount is RM15,000 and the borrower has already repaid RM3,000, then the 1% rate is im­posed on the balance sum of RM12,000 and not on the principal amount ,” said Mastura.

“We hope borrowers will no longer have any misconceptions about the calculations under the Ujrah scheme.”

According to Mastura, borrowers who opt for the Ujrah scheme also have the advantage of applying to the PTPTN to have their repayment structures rescheduled, something which the conventional borrowers are not eligible for.

She assured borrowers that their Ujrah loan facility would not be withdrawn even if they defaulted on their monthly payments.

A borrower would be categorised as a persistent defaulter if he had not made a single payment for a period of three years, she said. — Bernama