Interest scheme can be alternative funding for SMEs

The interest scheme can serve as an alternative source of business funding for small and medium enterprises(SMEs) under the new Interest Scheme Act 2016, says the Companies Commission of Malaysia (SSM).

Chief Executive Officer Datuk Zahrah Abd Wahab Fenner said the law was a small part of the Companies Act 1965, namely Division 5, Part 4 (now repealed), and applied primarily to protect consumers in golf, recreational clubs, memorial park and time-share schemes.

"Basically, the interest scheme involves the pooling of financial contribution from the public in exchange for an interest in a particular scheme.

"Currently, there are about 204 interest schemes registered under the Act, and includes those of golf clubs, memorial parks, properties and agricultural activities.

All are under the "Bhd' status with the total funding raised being RM20.6 billion.

"With the new Act, we have also extended the legislation to include private limited (Sdn Bhd) companies and this give an opportunity for SMEs to raise funds under the interest scheme," she told reporters after opening SSM's one-day conference themed, "Interest Schemes Act 2016: Alternative Financing for Business Growth', here today. -- Bernama