KUALA LUMPUR, April 10 — The constraints faced by cooperatives (co-ops) in obtaining financial assistance from banks and financial institutions are among the reasons for the slow growth recorded by the sector.
Cooperative Commission of Malaysia executive chairman Datuk Nordin Salleh said the co-op sector could be categorised as underserved due to the limited financial facilities available for them.
“If there are additional financial facilities available, I am certain the sector will improve the management of co-ops and have good governance,” he told reporters after the launch of the Cooperative Sector Financing Scheme by Co-opbank Pertama Malaysia Bhd (CBP) here today.
Earlier, CBP announced that it will allocate an additional RM700 million towards financing co-ops, increasing its total allocation for its co-op portfolio to nearly RM1.1 billion.
Nordin expressed confidence of a change in the sector’s landscape if there are more financial facilities available for co-ops.
“Currently, many co-ops are dormant and inactive. If there are more financial facilities (available for them), this can ignite a healthy expansion and become a (positive) trajectory for the sector’s growth,” he said.
Asked about the co-op sector’s contribution to national revenue, Nordin said he targets for the contribution to increase to 20 per cent from the current one per cent.
“It (the target) is a bit aggressive but the current one per cent does not represent the real contribution to the real economy,” he added.
It was previously reported that the Ministry of Entrepreneur Development had asked Bank Rakyat to increase its allocations for co-op business financing, and small and medium enterprises to 30 per cent in the next few years.
The Malaysian co-op movement comprises 14,245 co-ops with nearly 6.5 million members. — Bernama
