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Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the Prime Minister Dato' Seri Dr Mahathir Mohamad advising banks to give more loans to small traders. 15.11.2001.

Yesterday, the Malaysian Prime Minister Dato' Seri Dr Dr Mahathir Mohamad again advised banks to give more loans to small companies and traders. Sometimes, they (the banks) were too prudent. "They take the easy way out. They do not want to take any risk at all. But we will try and persuade them," he added.

We hope that banks can help applicants with reasonable proposals. We believe that the Government must formulate workable criteria to encourage banks to give loans without incurring bad debts. This is important. Even the National Assets Management Limited appears to be slowing down in its attempts to manage the bad debts.

MORE LOANS

In 1995, 1996 and 1997, the growth of bank loans was 20%, 28.5% and 26.6% respectively. These were unsustainable. After the 1997 economic crisis, it declined to 1.3% and by 1999 it was 0.1%. Between 1996 and 2000, the growth of loans in broad property sector was 17.3% a year, accounting for 35.9% of the total loans mainly due to higher loans to the construction and residential property subsectors.

The 2002 Budget allocates over RM33 billion for development. The pre-emptive package of RM3 billion in March, 2001 and the stimulation package of RM4.3 billion in September, this year, are public sector expenditure. If these can filter down, then more people will benefit. Meanwhile, the Government encourages consumers to spend money including the banks to give more loans. These depend on confidence. The Government must create confidence.

Dr Tan Seng Giaw