Expressing his support for Prime Minister Datuk Seri Dr
Mahathir Mohamad's directive to all banks to provide loans to small
entrepreneurs, Abu Bakar said only a few banks had been helpful.
On Thursday, Dr Mahathir said the Government had to issue
this directive because local banks were not interested in providing small loans
despite the availability of funds.
Dr Mahathir said that while banks felt it was more
profitable to provide big loans, small businessmen were to be blamed too as
they sometimes failed to service their loans.
The Finance Minister, in his Hari Raya message over
television, urged businessmen to be more responsible in repaying bank loans.
Over the past one week, newspapers have carried plenty of
news about the ways of loan sharks, and Deputy Prime Minister Datuk Seri
Abdullah Ahmad Badawi came out to say the government had directed the police to
investigate the operations of these shady characters.
Abdullah said he was saddened over an incident in
Seremban last week where a couple and their four-year-old son died three days
after they swallowed paraquat to escape harassment by loan sharks.
While there are businessmen who turn to loan sharks for
quick loans to tide over a financial hitch, there are Malaysians who seek such
loans to repay their gambling debts.
These gamblers know the consequences, particularly the
high interest and the possibility of being beaten for failing to pay up.
Then there are those who have committed themselves to
these loan sharks because they live beyond their means and not because they
have business loans to worry about.
While newspapers have run advertisements from licensed
moneylenders – we should not equate them to loan sharks – the latter have been
brave enough to put up notices in busy areas such as Puduraya. According to the
Housing and Local Government Ministry, there are about 2,000 licensed
Abdullah has correctly said that the people, especially
those from the lower-income group, should go to financial institutions set up
by the Government.
He said the Government had many schemes, such as the Tekun
programme and Amanah Ikhtiar Malaysia,
where traders could apply for loans for their business activities.
Political parties, trade associations and non-government
organisations should work together to publish a list of financial institutions
and agencies that offer such loans.
The media could also play its role by publishing such a
list with information on how the lower-income could apply for these loans. It
would go a long way in helping ordinary folk.
Moves should be made to encourage Malaysians to join
cooperatives where they can apply for quick loans to overcome their financial
The Government and the police should act first to plug
the loopholes as loan sharks are said to be well connected and influential.
Amendments to the Money-Lending Ordinance 1951 are
necessary to give police specific powers to act against loan sharks because the
authorities have no specific laws to turn to at present. With these amendments,
the police would be able to investigate, arrest and charge persons for loan
It is necessary to look at these loopholes because we do
not want suspected loan sharks to get off the hook on legal technicalities.
There is an urgent need to protect ordinary people who
turn to loan sharks out of desperation but at the same time, more information
must be made available at public places, such as pasar malam and community
centres, on how they can obtain easy loans from authorised agencies.
More powers must be given to the police and the courts,
including custodial sentence and whipping, to weed out these "sharks" that
cruise the sea of desperation.