Non-Performing Loans In Malaysia Among World's Highest

JOHOR BAHRU, Nov 13 (Bernama) – Malaysia’s non-performing loans (NPLs) among small and medium enterprise (SME) entrepreneurs are among the world’s highest, said Entrepreneur Development Minister Mohd Redzuan Yusof. As such, he said, the government had taken steps to reduce the NPLs by increasing entrepreneurs’ awareness on the ecosystem of their respective business ventures. Mohd Redzuan said in other countries, the rate of NPLs among SMEs was low, ranging at about eight per cent or less, while Malaysia’s was in the double-digit. “When we say double digit, it means 15, 16, 20 (per cent), and that is high, as the NPLs in other countries are really low. For example, I understand that China’s NPL rate is only at two per cent. “How can they achieve this? Maybe they learnt from successful SME models, which is what we are trying to do right now. Germany has a model which can help SMEs get a high rate of return and the country’s NPL rate is only at two per cent,” he added. Mohd Redzuan told reporters this after launching a Mini One-Stop Centre for Entrepreneurs in Plaza Angsana here Tuesday. He said the National Entrepreneur Group Economic Fund’s (Tekun Nasional) NPLs currently stood at RM600 million, adding, there were many factors which caused entrepreneurs to default on their loans, including failure to understand the market and its demands, the cost of doing business and the lack of creativity in conducting it. “Usually, businessmen who fail are the ones who copy from others, instead of taking the lead. They will copy, but not precisely because they do not understand, and as such, their business will not be able to grow,” Mohd Redzuan said. On another note, he said the government aimed to create 50,000 new SMEs annually over the next five years, and a million new jobs in the country. -- BERNAMA