jeffooi
17-12-2002, 01:07 PM
NEW STRAITS TIMES
Tuesday, December 17, 2002
Letters
<font size="+1">Banks same as Ah Longs</font>
I REFER to the controversy over Ah Longs, and stress that their role is a direct result of banks’ stringent laws on lending to small traders.
Two years ago, I resigned from a low-paying job to venture into a small business. Before I left, I refinanced my property with another bank. Based on my salary then, the bank granted me a loan equivalent to 60 per cent of the current market value (CMV) of my property, sufficient to settle the redemption sum plus a small excess amount, supposedly for my working capital.
The amount was insufficient as my venture required more than that, but I tried to make do. The business was slow, but prospects were sufficiently good to warrant a long-term investment and effort.
Recently, I approached the bank for an additional loan of up to 85 per cent of the CMV of my property. It was rejected. Reason: no evidence of income. The credit officer even told me that "you should know better than to ask".
Over these two years, I have maintained a prompt repayment record for my loan and credit card (which, incidentally, allows me a limit almost equivalent to the amount I am seeking). Besides, the additional loan will bring the advance margin to 85 per cent of the CMV, well within the 90 per cent norm.
I had no choice but to seek refinancing from another bank. That bank informed me that since I had a "preferential rate" for my loan with them, I would need to pay a penalty fee if I was settling the loan within five years.
The penalty is several thousand ringgit, meaning that the last two years' repayment by me was for nothing. Added to the new expenses incurred in transferring the loan, the whole matter was costly to me, with no benefit derived from it.
So, the attitude of this bank is no different from that of the Ah Longs. The worse thing is that banks' requirements are so strict, demanding and time consuming.
Banks offer those who are financially capable more money and facilities, frequently begging big customers with "strong" records to take more loans. And they are the people who do not need the money. Small timers like me are scrutinised, scanned, interrogated and turned down.
Unless the Government deals with banks first, and forces them to delete their self-serving rules and regulations, it should not blame Ah Longs.
Banks are worse than them. The only difference is that banks are licensed to exploit. Guess who bailed me out pending the new loan draw-down: a known Ah Long with minimum fuss and special low rates.
L.M.L.
Kuala Lumpur
SOURCE:
http://www.nst.com.my/Current_News/NST/Tuesday/Letters/20021217082655/Article/
Tuesday, December 17, 2002
Letters
<font size="+1">Banks same as Ah Longs</font>
I REFER to the controversy over Ah Longs, and stress that their role is a direct result of banks’ stringent laws on lending to small traders.
Two years ago, I resigned from a low-paying job to venture into a small business. Before I left, I refinanced my property with another bank. Based on my salary then, the bank granted me a loan equivalent to 60 per cent of the current market value (CMV) of my property, sufficient to settle the redemption sum plus a small excess amount, supposedly for my working capital.
The amount was insufficient as my venture required more than that, but I tried to make do. The business was slow, but prospects were sufficiently good to warrant a long-term investment and effort.
Recently, I approached the bank for an additional loan of up to 85 per cent of the CMV of my property. It was rejected. Reason: no evidence of income. The credit officer even told me that "you should know better than to ask".
Over these two years, I have maintained a prompt repayment record for my loan and credit card (which, incidentally, allows me a limit almost equivalent to the amount I am seeking). Besides, the additional loan will bring the advance margin to 85 per cent of the CMV, well within the 90 per cent norm.
I had no choice but to seek refinancing from another bank. That bank informed me that since I had a "preferential rate" for my loan with them, I would need to pay a penalty fee if I was settling the loan within five years.
The penalty is several thousand ringgit, meaning that the last two years' repayment by me was for nothing. Added to the new expenses incurred in transferring the loan, the whole matter was costly to me, with no benefit derived from it.
So, the attitude of this bank is no different from that of the Ah Longs. The worse thing is that banks' requirements are so strict, demanding and time consuming.
Banks offer those who are financially capable more money and facilities, frequently begging big customers with "strong" records to take more loans. And they are the people who do not need the money. Small timers like me are scrutinised, scanned, interrogated and turned down.
Unless the Government deals with banks first, and forces them to delete their self-serving rules and regulations, it should not blame Ah Longs.
Banks are worse than them. The only difference is that banks are licensed to exploit. Guess who bailed me out pending the new loan draw-down: a known Ah Long with minimum fuss and special low rates.
L.M.L.
Kuala Lumpur
SOURCE:
http://www.nst.com.my/Current_News/NST/Tuesday/Letters/20021217082655/Article/