KL unveils $132m fund for troubled Malay businessmen
KL unveils $132m fund for troubled Malay businessmen
KUALA LUMPUR (Agencies): Malaysian Prime Minister Mahathir Mohamad announced on Tuesday a 500 million ringgit (US$132 million) fund to aid ethnic Malay businesses pressured by the current economic slowdown.
Of the total, 380 million ringgit has been allocated as loans to provide working capital for Malay entrepreneurs, the premier said in a statement issued to Bernama news agency.
The remaining 120 million would go towards helping more than 10,000 entrepreneurs facing problems with non-performing loans (NPL), said Mahathir who is acting finance minister.
The premier took over the finance portfolio following the unexplained resignation of Daim Zainuddin on June 1.
Mahathir said the Entrepreneurs Recovery and Development Fund was aimed at curbing rising NPLs and to help small and medium- size industries which have problems securing finance.
The fund would assist "bumiputera" -- ethnic Malays and other indigenous races -- businesses facing NPLs of under a million ringgit by reducing their loans and provide them with working capital.
Ethnic Malays make up nearly 60 percent of Malaysia's 23 million people. The largest minorities are ethnic Chinese and Indians.
Under the program, finance institutions would abolish all accumulated interest payments including penalties for unsecured loans.
Loan amounts would be reduced by 40 percent. Participants would receive financial assistance from the fund totaling 30 percent of the total loan and must settle the remaining 30 percent within 18 months.
For secured loans, financial institutions would remove between 50 to 100 percent of accumulated interest payments and penalties, and provide a two year moratorium for loan repayment.
The program would provide fresh loans of not more than three million ringgit each as working capital for entrepreneurs.
Participants are required to attend various training programs including finance, management and motivational courses to provide them with skills to compete amid the current slowdown.
Their operations would be monitored to ensure efficient finance management and loan repayment, Bernama said.
To qualify, it said the NPL must not be a result of mismanagement or fraud and that only loans classified as non- performing between January 1998 and June this year would be accepted.
The government has revised downwards its economic growth forecast this year to between five and six percent, from seven percent previously, as the global slowdown begins to bite.
In March Mahathir unveiled a three-billion-ringgit supplementary budget to shore up the economy amid the U.S. slowdown. He said the government has to take "preemptive measures" to sustain the growth momentum.
Meanwhile, Malaysian human rights commissioners on Tuesday visited six opposition activists imprisoned without trial in northern Malaysia to examine claims they are being mistreated, an official said.
Families of the six told the Malaysian Human Rights Commission last week that the detainees were losing weight, being denied medical attention and reading materials and were prevented from performing Islamic prayers at the Kamunting prison camp in Perak state.
Commissioners Hamdan Adnan and Simon Sipaun visited the camp for more than five hours on Tuesday to meet the six detainees and prison officials, the government-appointed body's' secretary Kamaruddin Baria told The Associated Press.
He said the commission was expected to issue a formal statement about the visit on Wednesday.
The six detainees, all linked to the opposition National Justice Party, were among ten anti-government activists arrested in April under the Internal Security Act. The four others have since been released.
The act, which allows for indefinite detention without trial was introduced at the end of the British colonial period to quell a communist insurgency which ended years ago.
The government claims the detainees threatened national security by plotting violent demonstrations to topple Prime Minister Mahathir Mohamad. The opposition denies advocating violence.