KUALA LUMPUR: Cooperatives with poor repayment records will be barred from receiving new financing, Parliament was told.
Deputy Entrepreneur and Cooperatives Development Minister Datuk Mohamad Alamin said the move is intended to ensure public funds are managed responsibly and benefit all cooperative members.
“Any outstanding loans will be recovered, and legal action will be taken where necessary,” he said in reply to a question from Roslan Hashim (PN-Kulim Bandar Baharu) on whether the ministry plans to stop providing financing to cooperatives that failed to perform despite repeated assistance, during Question Time on Wednesday (Feb 11).
Mohamad said that in 2025, 66 cooperatives received financing under the Malaysia Cooperative Societies Commission’s Revolving Capital Fund (TMP-SKM), totalling RM75.32mil.
He said 78 cooperatives benefited from business development assistance grants totalling RM8.59mil, aimed at supporting working capital and the purchase of business assets.
In response to a supplementary question from Mohd Kurniawan Naim Moktar (BN-Kinabatangan) on why some cooperatives fail, Mohamad said it was often due to a lack of shared objectives among members and the appointment of less professional board members.
“These factors have caused many cooperatives to remain conventional and unviable, as management lacks creativity in exploring new business opportunities,” he said.
He added that some cooperatives have become overly reliant on government assistance and incentives, without making serious efforts to grow their businesses.
