KUALA LUMPUR: To reduce illegal moneylending activities, proper financing schemes should be provided to small and medium enterprises (SMEs), said the Prime Minister.
Datuk Seri Najib Tun Razak said such funding would also help the industry to grow and the country to realise its goal to transform into a high-income nation by 2020.
"We can reduce the role of Ah Long in this country. We don't want Ah Long to become more successful, we want proper institutions and schemes that can benefit the people," said Najib at the launch of the Kojadi SME Loan Scheme (KSME) for Chinese SMEs and the Secretariat for the Advancement of Malaysian Entrepreneurs (SAME) yesterday.
The RM50mil (S$18 million) fund, set aside under Budget 2015, will be managed by Koperasi Jayadiri Malaysia (Kojadi) - a cooperative of MCA.
It will offer qualified businesses access to loans between RM50,000 and RM250,000 at an interest rate of 4 per cent.
Najib said with the programme in place, the SMEs would be able to grow to reach the targeted 41 per cent of the country's Gross Domestic Product.
The Prime Minister said Kojadi was chosen because of its "five-star rating with a good track record".
He noted that Kojadi had been giving out study loans and recording a low 1.7 per cent for its non-performing loans.
He urged other component parties of Barisan Nasional to follow MCA's example of helping businesses to get loans based on their needs.
MCA president Datuk Seri Liow Tiong Lai said efforts were being made to get a bank licence for the Kojadi but did not elaborate.
He said the cooperative, set up in 1981, had nearly 62,000 members and provided study loans amounting to over RM239mil to 11,200 students.
It is ranked 59th among the top 100 cooperative societies in Malaysia and the 20th best cooperative in terms of asset or turnover, he added.
"MCA, together with Kojadi, is committed to helping entrepreneurs and SMEs who find it hard to access loans," he said.
Liow said KSME and SAME came about through the close working relationship between MCA and the Chinese community.
He also praised SAME for offering aid to more than 800 businesses affected by the east coast floods late last year.