Investment criteria among proposed reforms, says Sim
BUTTERWORTH: A new law to replace the Cooperative Societies Act is being drafted to strengthen governance and modernise Malaysia’s cooperative sector, says Entrepreneur Development and Cooperatives Minister Steven Sim.
He said the proposed legislation will introduce substantive reforms to modernise the administration of cooperatives while facilitating business and investment activities in line with current economic needs.
“One main objective of the new Act is to reform and modernise the administration of cooperatives in Malaysia.
“The reforms will include facilitating cooperative businesses, investment criteria, conditions and processes,” he told reporters after opening National Cooperative Day 2026 at the PICCA Convention Centre, Butterworth Arena yesterday.
Sim said the cooperative sector continued to record encouraging growth, with business turnover rising by nearly 20%, from RM68bil in 2024 to almost RM82bil in 2025.
He attributed the growth to the government’s continuous efforts to strengthen the capacity of cooperatives, accelerate digitalisation and improve governance across the sector.
Separately, Sim announced two major reforms to cooperative Ar-Rahnu services, which will take effect in September, to make the services more transparent, competitive and consumer-friendly.
Under the first reform, the 2.5% fee imposed on the value of pledged items (marhun) will be abolished.
The monthly Ar-Rahnu profit rate will also be standardised at up to 1% for cooperative members and up to 2% for non-members.
“This measure aligns with cooperative principles, which place the interests and welfare of members at the forefront.”
The second reform will allow cooperatives offering Ar-Rahnu services to auction pledged items through a tender process as an alternative to the existing public auction and e-auction methods.
According to Sim, the move is expected to enhance transparency, lower implementation costs and provide a more flexible and competitive process.
Cooperative Ar-Rahnu services recorded a turnover of RM17bil in 2025, accounting for 21% of the cooperative sector’s total turnover compared with the RM1.6bil turnover recorded in 2024.
As of Dec 31, 2025, Malaysia had 16,468 registered cooperatives with nearly 7.3 million members.
“This means one in every four Malaysians is a cooperative member,” he said.
The country’s cooperative movement has RM18.6bil in share capital and fees, with assets valued at RM186.7bil.
