MICROCAPITAL BRIEF: Malaysian Chinese Association Launches $16.4m Microloan Fund to Train, Finance Entrepreneurs in Malaysia

In an effort to promote and train entrepreneurs, the Malaysian Chinese Association (MCA), a political party in Malaysia, launched a MYR 50 million (USD 16.4 million) microloan fund in January 2012. The 1MCA Micro Credit for Youth Fund is for Malaysian citizens looking to fund an existing or new business [1]. Two cooperatives affiliated with MCA, Koperasi Jayadiri Malaysia Berhad (KOJADI) and Koperasi Serbaguna Malaysia (KSM), will service the microloans [2]. Malaysian citizens between the ages of 21 and 45 are eligible to apply and 1MCA will give priority to MCA members, members of non-governmental organizations as well as single parents [3].

Individuals may apply for microloans ranging from MYR 5,000 (USD 1,642) to MYR 20,000 (USD 6,566) via the website of MCA or KOJADI [4]. After submission of the application forms, MCA projects the disbursement of approved loans will take no longer than 21 days [5]. The loans will carry terms of three to five years at an annual interest rate of seven percent. The program will also provide successful applicants with business development training free of charge. The project is open to all qualifying Malaysian citizens regardless of political or ethnic affiliation [2].

By Courtney Snelling, Research Associate

About the Malaysian Chinese Association (MCA): Founded in 1949, The Malaysian Chinese Association (MCA) is a political party in Malaysia that represents the interests of Malaysians of Chinese origin. MCA is one of twelve members of the Malaysian Barisan Nasional, a political coalition in Malaysia.

About Koperasi Jayadiri Malaysia Berhad (KOJADI): Established in 1981, Koperasi Jayadiri Malaysia Berhad (KOJADI) is a Malaysian cooperative with the primary objective of extending educational loans to needy students to pursue higher education. KOJADI also offers microentrepreneurial loans in conjunction with the Malaysian Chinese Association. KOJADI has approximately 64,000 members with total assets of MYR 110 million (USD 36.1 million). Since 1981, KOJADI has provided MYR 180 million (USD 59.1 million) in education loans to approximately 8,800 students for their studies in Malaysia and abroad.

About Koperasi Serbaguna Malaysia Berhad (KSM): Malaysian Chinese Association (MCA) youth initiated the formation of Koperasi Serbaguna Malaysia Berhad (KSM) in 1968. The objective of the organization is to pool resources to assist KSM members through cooperative financial intermediation. KSM is open to all Malaysian citizens over the age of 18. Currently, KSM has approximately 265,000 members. Approximately 97 percent of the members are from the Chinese community.

Sources and Additional Resources:

[1] New Straits Times: “Malaysia: RM50m Micro-Credit Fund for the Business-Savvy”, 1/18/2012. http://www.nst.com.my/local/general/rm50m-micro-credit-fund-for-the-busi…

[2] Microdinero.com: “Microloan program targets young entrepreneurs in Malaysia”, January 18, 2012. http://www.microdinero.com/nota_eng.php?subseccion=&notId=4410

[3] MicroWorld.org: “A Microcredit Fund for “Young” 45-year Olds”, 1/24/2012. http://www.microworld.org/en/news-from-the-field/article/microcredit-fund-%E2%80%9Cyoung%E2%80%9D-45-year-olds

[4] Malaysian Chinese Association http://www.mca.org.my/cn/files/2012/01/MicroCreditForm.pdf

[5] TheMalaysianInsider.com: “MCA Launches Microcredit Fund for Youths”, by Shazwan Mustafa Kamal, January 17, 2012. http://www.themalaysianinsider.com/malaysia/article/mca-launches-microcredit-fund-for-youths

[6] http://en.wikipedia.org/wiki/Malaysian_Chinese_Association

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