Lim Guan Eng : “Place SME loans to Chinese & Indian businesses under BSN”

MEDIA STATEMENT BY YB LIM GUAN ENG,
DAP MEMBER OF PARLIAMENT FOR BAGAN, PENANG

(The RM 100 million loans to Chinese-owned MSMEs and RM 50 million loans under Tekun Nasional for Indian-owned SMEs should be placed under BSN, which has no restrictions, instead of under SME Bank and Bank Rakyat, which both require businesses to be Syariah compliant.)

Placing the special RM 100 million loans for Chinese-owned Micro, Small, and Medium Enterprises (MSMEs) not under Bank Simpanan Nasional (BSN), which has no restrictions, but instead under SME Bank and Bank Rakyat, which require businesses to be syariah-compliant, has created some dissatisfaction amongst non-Muslim Chinese businesses. Chinese-owned MSMEs that do not conduct syariah-compliant businesses, such as food and beverage businesses, traditional Chinese medicine shops, and the entertainment industry, will be deprived of the opportunity to access such loans.

The RM 50 million Skim Pembangunan Usahawan Masyarakat India (SPUMI), under Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN), for fully owned Indian companies, also requires that their business activities be syariah-compliant. There is no problem with TEKUN’s RM 1 billion loan for Malay businesses complying with the syariah requirement.

In other words, both Indian and Chinese-owned companies must be syariah-compliant even though they are not Muslims. Those who claim that such loans show that the financing needs of businesses from all communities are treated fairly are both dishonest and discriminatory when the loans specifically for Indians and Chinese are subject to restrictions. Have those in charge forgotten that most Chinese and Indians are not Muslims?

As Chinese-owned MSMEs comprise a large portion of the 1.1 million MSMEs in Malaysia, such restrictions by SME Bank and Bank Rakyat are a loss to those Chinese MSMEs which are not syariah-compliant. Under the SME Bank’s Success financing programme, businesses can apply for financing between RM 100,000 and RM 3 million at rates as low as 3.5% per annum. For Bank Rakyat, its BR Prosper-i scheme offers financing from RM 1,000 to RM 1 million at rates starting from 4.5% per annum.

We must respect the right of Tekun Nasional, SME Bank or Bank Rakyat to decide to conduct business only in the syariah-compliant sector. To ensure equal access to financing for all MSMEs, such RM 100 million in Chinese MSME loans and RM 50 million in SPUMI loans for Indians should be placed under BSN, which does not impose syariah-compliant restrictions and allows its customers to choose between Islamic and non-Islamic banking.

Allowing BSN to handle these loans involving Chinese and Indian borrowers makes practical sense, as BSN has 387 branches nationwide compared to only 17 for SME Bank and 148 for Bank Rakyat. BSN can serve all Malaysians regardless of religion and has a broader geographical reach in Sabah and Sarawak than SME Bank and Bank Rakyat.