SEED: We have no reason to hide figures

Responding to a call from an Indian business group, the secretariat explains the loans given out to Indian businesses.

PETALING JAYA: The Special Secretariat for Empowerment of Indian Entrepreneurs (SEED) today said that people should first dismiss the misconception that it is a MIC initiative.

SEED director AT Kumararajah explained that the secretariat was set up by the Prime Minister’s Department to assist in giving out the RM180 million allocated for the Indian community.

He added that G Palanivel was playing his role in SEED as a cabinet minister and not as the president of MIC.

Kumararajah claimed that SEED had data since August 2012 up until Dec 6, 2012 with regard to the number of applicants, the amount of loans dispersed and the applicants who had been rejected.

“It is a work-in-progress, we have no reason to hide the figures. At the same time, it’s not easy to collect data from the 13 banks affiliated with this programme and all its branches from around

Malaysia. We are getting there,” he said.

The SEED director was responding to the Malaysian Indian Business Association (Miba) which demanded MIC to reveal the figures pertaining to the funds allocated for Indian businesses.

According to Kumararajah, there had been 932 applications as of December 20 this year. Out of which, 643 had been approved and dispersed and 20 applications rejected.

The balance 269 applications were still being processed but 57 of them were already lined up out of which, 28 almost completed.

He said that out of the total RM2.43 billion allocated by the government for businesses, RM180 million was allocated specifically for the Indians.

This amount, he added, was broken down and parked under several other programmes and financial institutions – RM10 million to Malaysian Industrial Development Finance (MIDF), RM10 million to Small and Medium Enterprises Corporation Malaysia (SME), RM30 million to Tekun and the remaining RM130 million to banks.

Responding to another point raised by Miba, Kumararajah said: “The funds given out by banks is indeed using the Islamic concept. People have to realise that the Islamic concept is merely a funding mechanism and has proved to be one of the fastest growing mechanisms.”

“There is no difference between normal loans and that of the Islamic concept, the only thing is the ‘halal’ factor. Still, there is leniency ranging from 15%-20% of the business being of ‘non-halal’ in nature,” he added.

Creating awareness

Explaining further on the figures, Kumararajah said RM24.37 million had been given out so far to the above mentioned 643 approvals – RM3 million via SME, RM9.9 million via MIDF, RM9 million via Tekun and RM13.8 million via banks.

“We have the figures and just need time to collect the precise data. Once that is complete, we would definitely publish the details,” he told FMT.

According to Kumararajah, Tekun had given out a total of RM34.5 million to 4,212 companies within a span of four years since its inception in 1998.

But since August 2012 to date due to the specific allocation for the Indian community, Tekun had given out more than RM9 million in funds to Indian businesses.

“We are doing our best to create awareness. We have held 69 ‘pocket talks’ thus far with 8,921 participants. This includes Miba. We have reached out across the board, even to several NGOs,” said Kumararajah.

He said that an alarming number of companies or businesses had not been registered, nearly four times the number of those registered and this was the main reason why applicants were rejected.

Kumararajah also cited the lack of discipline and responsibility among applicants such as delays in producing documents for the loans.

“We understand that there must be a handicap in requirements when handing out soft loans like this to the Indian community but we are still working on that. We need to improve as well, I’m not going to say that we are perfect,” he said.

Kumararajah added that SEED was going out of its way to assist the Indian community as well, having made 810 referrals on top of the 932 applications to banks and financial institutions.

“Please channel more applicants to us, we will do all we can to help. But be realistic about the time line,” he said.