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.