Difficulty in securing loans among factors stunting economic growth of Bumiputeras

The difficulty in securing loans from financial institutions is one of the key factors why Bumiputeras, particularly entrepreneurs, failed to expand their economy.

Malay Chamber of Commerce Malaysia (DPMM) President Datuk Dr Syed Ali Alattas said this also led to Bumiputera economy becoming stagnant.

He cited a DPMM study which found that only five per cent of Bumiputeras were in the high-income group in the country.

Syed Ali said lack of affordable housing projects for Bumiputeras also affected them in planning their economic future.

"We are back to square one, (Bumiputera's economic dominance is low).

"The gap between Bumiputera and non-Bumiputera entrepreneurs economic dominance is getting bigger," he told reporters on the sidelines of the Restructuring of the Malay Economic and Financial Management Seminar here, today.

Syed Ali also expressed concern on the preponderance of some developers in building expensive housing and commercial building projects targeting at foreigners in order to reap high profits.

In the long run, this situation will affect the floundering Bumiputera economy, including that of the entrepreneurs, he added.

In order to resolve this issue, he proposed that local banks to join forces to create a fund to disburse loans to Bumiputera entrepreneurs as start-up capital or to buy a house.

"If there were any borrower who defaulted on a loan, the losses will be borne jointly by the banks as the burden can be shared among them, thus the risks (non-performing loans) are spread among them," he said.

At the event, the chamber signed a memorandum for the setting up of the DPMM Foundation's Leadership Research and Development Institute.

The institute is aimed at building a new generation of dynamic and upright leaders to strengthen the role of the DPMM and Malay business associations.

It will also meet the aspirations and expectations of the Malay entrepreneurs, especially those in the small and medium enterprise sector who are still lagging far behind and need leadership and guidance to grow their business. -- Bernama