RM239.56 million in unpaid loans from Cooperatives Devt Department Revolving Fund

KUALA LUMPUR: The Cooperative Development Department Revolving Fund (TMP JPK) under the Cooperatives Commission of Malaysia (SKM) failed to collect repayments from 526 accounts, bringing the amount of nonperforming loans to RM239.56 million up to December 2016.

According to the AuditorGeneral’s Report 2016 Series 2 tabled in the Dewan Rakyat today, this situation could adversely affect the giving out of loans under the TMP JPK.

The report revealed that 12 cooperatives had never made any loan repayment for between three and 28 years since the date of the first payment to be made, with the total sum owed amounting to RM3.32 million.

“It was also found that the set duration of loan repayment had lapsed for nine of these 12 cooperatives, involving arrears totalling RM3.18 million.

“No legal action had been initiated against the errant borrowers, although in June 2014, the Credit Financing and Control Division (BPKK) had proposed such action against 41 accounts in arrears for 26 to 244 months,” the report said.

However, further auditing of the accounts’ files involved found that up to the day of auditing, only one cooperative faced action from the legal adviser, while action had yet to be taken against the other 40 with arrears amounting to RM11.23 million.

According to the report, forfeiture of their collateral had not been done to get back the amount owed and also no monitoring of the projects or activities by the BPKK due to the problem of manpower shortage.

The revolving fund (TMP JPK) was set up in 1985 under Section 10 of the Financial Procedure Act 1957, to assist cooperatives by providing them loans to carry out feasible projects.

Therefore, to improve managing of the TMP JPK, it was proposed that SKM review the monitoring aspect by involving its state and regional branches to get back the amounts owed.

“SKM should come up with a suitable policy on collateral for loans of below RM50,000 to reduce the non-performing loans of cooperatives.

“This should include legal actions such as liquidating the loan collateral or filing a civil suit against the errant borrowers, and taking action against officers who fail to perform their responsibilities as stipulated,” the report said. - Bernama