| Cooperatives Can Impose Only Four Loan Charges - Ismail Sabri |
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KUALA LUMPUR, Nov 3 (Bernama) -- Cooperative Credit Societies are now allowed to impose only four loan charges, said Domestic Trade, Cooperative and Consumerism Minister Datuk Ismail Sabri Yaakob.
He said they were a processing fee of not more that RM100, a RM10 stamp duty, an insurance payment (based on type of loan and its amount), and a loan settlement fee (five per cent of the loan balance).
The restriction is enforced with immediate effect to ease the burden of borrowers and revive the functions of the cooperative movement, he told reporters at the parliament lobby here Tuesday.
"Credit cooperative societies were supposed to help members by lending money to them but they (cooperatives) had been imposing exorbitant fees, thus causing hardship to borrowers.
"The charges imposed totalled up to 40 per cent of the loan. This is outrageous and it defeats the purpose of having cooperative credit societies," he added.
He said among the loan charges imposed were an agent fee, an agent commission, a sinking fund fee, an insurance payment, a protection fee, and all sorts of deposit payments.
"For a RM10,000 loan, a member will get only RM6,000 after deducting the loan charges.
"Many cooperative members had complained of the excessive charges. Some cases had been reported in the newspapers.
"Some members had alleged that the cooperative societies could be liken to a licensed 'ah long'," he said.
Ismail Sabri said the ministry had identified 22 of 550 cooperative which had imposed excessive loan charges and they had been told to toe the line or had their licence revoked.
-- BERNAMA
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