Review to strengthen delivery to the Indian business community

At the discussion with various financial institutions

Last Friday (March 11, 2011) the SITF secretariat organized two meetings to follow up some of the major questions raised by the Indian community through various business awareness programs organized by the Taskforce

A number of key concerns are:-

·         Questions pertaining to interest charged for micro loans especially loans below RM50,000

·         Questions pertaining to being black listed by financial rating institutions

·         Questions pertaining to options available in terms of business loans

·         Questions pertaining to financial literacy, awareness and training

Meeting One – Reviewing past experiences & charting forward

The first meeting took place at 11.30am at Bank Negara with representatives from Bank Negara from Financial surveillance Department, AKPK & Corporate communication Department. Others present were from BSN and Agro Bank.

In the discussions that followed we noted that the interest rates for micro loans are high. This is not only due to cost of operating the loans but also due to the high risk attached to this. Both BSN and Agro Bank indicate that they are lending using their funds rather than soft loans via Government provisions which Tekun is benefiting from.

Also noted that financial literacy is the main problem namely the informal business community is not really getting their books organized and not using basic financial planning and management approaches. This can be address through capacity building programs.

The role of the credit rating agencies is to provide basic information on the financial history and behavior of the potential borrower. On the past settled loans and if records don’t capture it, it is important for the borrower to correct this. If need be a complaint could be lodged with bank Negara on problems encountered.

SITF will consider organizing a whole package of financial development programs using all the current Federal government coordinated programs as a package such as capacity building though AKPK, business training and advisory services such as Bank Negara’s LINK etc. Then channel them to a whole range of micro credit programs such as AIM, Tekun, BSN, Agro bank etc.  SITF is considering launching a campaign to 30 different small towns in the middle of the year through a national campaign on access to wealth creation & micro business.

It is then up to the community to reorganize themselves and match up to the requirements over the next 12 months to become more formalized and bankable. Through financial literacy we need to modernize ourselves and become acceptable to financial institutions.



SITF team together with Indian business rep at SME Corp



Meeting Two- Exploring new options

The second meeting was at SME Corp at MATRADE in the afternoon at 3pm on the same day. For this meeting SITF had invited a number of Indian business associations and three turned up namely MIBA, Indian restaurants and the barbers association. Also present was the business unit from the MIC youth section. The SME Corp officers explained their business products and this scheme looked very attractive as they have recently introduced:-

·         Enrichment & Enhancement Programme (E2)

·         Business Accelerator Programme (BAP)

These two products focused on four major areas of financial services

·         Diagnostics

·         Capacity Building

·         Advisory & Technical support

·         Facilitating access to Financing

On this matter SITF has an earlier article on these features. One point became very clear in the course of the discussion that very few Indians were coming to SME Corp for assistance and this is an area of concern. Therefore it is important to ensure a majority of Indians come to know of SME corp and their economic development programmes.

SITF has decided to host two follow up meeting to ensure that a larger number of Indian participate.

First, on Friday March 18, 2011 at 6pm, SITF is hosting a meeting with all the major Indian business associations at the Jln Gasing Lotus restaurant. The objective is to brief and ensure that each of the associations will play their role. This is a planning meeting to organize the March 25^th meeting.

Second, on Friday March 25, 2011 from 2pm to 3pm – SITF will host a special public meeting to introduce SME corp. Our target is to reach 300 people at this meeting and after the talks, Q & A, there be booths/clinic time for one to one discussion with SME corp officials.