A Sabah inspiration

Dr Yee Moh Chai and Musa Aman

MBF gets money ideas from Chief Minister Musa Aman and his team

Ninian Mogan LourdernadinNinian Mogan Lourdernadin, chief executive officer of MBF Holdings Berhad, notes that illegal money lending or loan sharking is on the rise in Malaysia. But he is all praise for the Sabah government which has curbed it with innovative lending to the poor and helping Sabahans manage their finances to avoid bankruptcy. And this, he says, has inspired his company to launch its first low interest personal loan to fight loan sharks.

Official statistics show Sabah has the lowest rate of insolvencies: About 0.3% or 12,000 bankrupts out of a population of 3.2m; compared to the national average of 0.8% or 240,000 bankrupts among 28m people, one of the highest in the world.

Economists say the statistics show that Sabahans are generally rich and well looked after by the government of Chief Minister Musa Aman who is in his eighth year of office. Sabah is flushed with cash and the state has just approved its biggest 4 billion ringgit ($1.3 billion) spending for next year. The sterling management of state finances has won accolades from Ambrin Buang, Malaysia’s no nonsense auditor-general, for 11 straight years.

Gan Kheng ChaiSabah has been offering almost interest-free microfinance to villagers to start small businesses or to help hawkers and small entrepreneurs to expand their business. Government-backed thrift societies offer low interest personal loans to their members. The Sabah Credit Corporation, a lending arm of the Sabah government, offers housing and personal loans to civil servants at low monthly repayment.

“It is Sabah government’s enduring quest to minimize the strain and burden of its people that has inspired us to launch MBF Cards Power Loan,” Lourdernadin says.

The loan is so named because “it puts power in the hands of borrowers”, says Gan Kheng Chai, president of MBF Cards. The selling point is easy repayment. Borrowers can choose one of six ways to repay their loans from as little as 99 to 599 ringgit a month. Those aged between 21 and 60 who earn at least 15,000 ringgit a year can borrow from 2,000 to 30,000 ringgit. Interest rate is comparatively low at a flat rate of 9.89% a year. No collaterals or guarantors are needed.

The loan can be used for business, college tuition, medical treatment, holidays, wedding or whatever other purposes, Gan says.

Deputy Chief Minister Dr Yee Moh Chai, who represented Musa at a recent launch of the MBF loan in Kota Kinabalu, says it will complement Sabah’s finance industry.

With so much cheap money in the market, there is no reason why people should turn to loan sharks who charge exorbitant interest, bankers say.

Dr Yee tells banks and finance companies to tailor their lending to meet every customer’s needs as he urges the public to turn to them for funds.

“I hope they will continue to introduce products that cater for small and home-based businesses,” he says. – Insight Sabah

Pictures by Victor Lo

A cat and mouse game ►

Money aiming at rural poor ►

Facing up to lending challenges ►

Cash-rich Sabah is riding high ►

Spending big for growth ►

Banking big on Islam ►

The envy of debt-ridden Europe ►

Posted on December 22, 2011

Malay 中文 Kadazan
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