Co-ops in Malaysia with poor repayment records will be barred from new financing, it has been reported.
According to Malaysian news outlet the Star, co-ops development minister Datuk Mohamad Alamin told Parliament the move will ensure public funds are managed responsibly and benefit all co-op 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), who had asked if the ministry plans to stop financing co-operatives that fail to perform.
Last year, said Mohamad, 66 co-ops received financing under the Malaysia Cooperative Societies Commission’s Revolving Capital Fund totalling RM75.32m.
He said 78 co-ops benefited from business development assistance grants totalling RM8.59m, aimed at supporting working capital and the purchase of business assets.
Mohamad added that co-ops often fail because of a lack of shared objectives among members and the appointment of less professional board members.
Some co-ops have become overly reliant on government assistance, he warned.
(Image of Malaysian parliament building in Kuala Lumpur by CEphoto/WikiCC)
