Posted by SM Maulana
Press statement by Dato’ Ch’ng Toh Eng, MCA Central Committee Members and chief of MCA New Villages Bureau
While the announcement at the National Rubber Small Holders Co-operative AGM by the Minister of Rural and Federal Development Minister YB Tan Sri Muhammad Muhammad Taib that the ministry would write-off debts worth RM 139.64mil involving 33,957 rubber smallholders in view of rising cost of living will be welcomed by the borrowers, “clarification is needed on the basis and method that will be used to write-off the debts.” The clarification was sought by Dato’ Ch’ng Toh Eng, MCA Central Committee member.
“It is important for tax payers to be informed on which authority will pay off the debts to the government, method of calculation and how it will be done to ensure transparency. The ministry should take all necessary steps to avoid its decision being misconstrued as taxes being deployed to bail out borrowers who may not be servicing their loans or that the government suffered financial losses when lending out these loans,” said Toh Eng who is also the chief of MCA New Villages Bureau.
Toh Eng then inquired, “for borrowers who have finished settling all their loans, will the ministry reimburse them the amount which they have fully paid up?” He also voiced concern that “borrowers who have regularly and responsibly serviced their loan at each month may also cry foul and cease servicing their loans altogether.”
Meanwhile, Toh Eng also asked, “are there any loan defaulters at the moment? In MCA, we always encourage financial prudence. With such an announcement whereby the ministry would write-off debts, we are alarmed that an increase of non-performing loans may occur as borrowers may not have the inclination to be responsible in repaying their debts.”
Toh Eng also highlighted that the genuine intention of the government to alleviate the rakyat’s burden and eradicate poverty may be abused in the process. “We are also concerned that the rate of borrowers misusing government loans for other intentions may grow. As it is, The New Straits Times on 29 May 08 reported that ‘more than RM70 million worth of subsidized diesel has been smuggled out of the country, with fishermen being identified as the main culprits.’” NST had reported that fishermen could make a profit from selling subsidized diesel to Thailand and Indonesia without going to sea.