Banks too strict,say Malay property developers

KUALA LUMPUR: The Malay Property Developer Association of Malaysia (PPHMM) is crying foul over strict and stringent measures imposed by banks in approving loans to its members who want to develop Malay reserve land, especially in Kuala Lumpur and Selangor.

Its president, Mohd Wari Mat Zaki, claimed that the banks were reluctant to approve loans to PPHMM members because of the strict conditions imposed when developing Malay reserve land.

"Banks would not like to give out loans as the land would not be a good collateral for them because it cannot be transferred to parties other than Malays.

"As such, the Malay developers face difficulty in securing loans from banks and would not be able to move ahead with their projects," he said at a briefing on issues faced by the Malays property developers here yesterday.

However, Mohd Wari and other committee members of PPHMM could not ascertain as to how many of its members were affected by such stringent bank policy on Malay reserve land, saying only that at least 50 out of about 100 members were operating their business in the Klang Valley, including Selangor.

"We could not provide the exact figure as today is our first meeting and we had just formed a committee to look into such grouses by our members," he said.

With about 100 companies registered under PPHMM, he said, the association members had a total gross development value of about RM5 billion nationwide, of which RM1 billion worth of projects alone were located in the Klang Valley.

He urged banks to provide easier access to funding for its members who wanted to develop Malay reserve land.

"We are not asking them (banks) to provide 100 per cent loan or impose certain ceiling for the funds. We would appreciate it if they (banks) can approve loans of up to 25 per cent of the total investment costs. This is to keep us going with our projects," he said.

At the same time, Mohd Wari called on the government to look into the problems faced by Malay property developers whom, he said, were not only trying to improve the living standards of the Malays but also contributing to the country's economy.

With this in mind, he said, the government should continue with its support to help Malay developers by setting up a special fund in the form of loans to assist them, such as providing term loans or bridging finance.

"We hope for continued support from the government to help Malay developers, by giving them opportunities and preference in developing the Malay reserve land, including developing housing schemes dedicated to Malays so that the reserve land would not fall to the hands of the others."

Mohd Wari said the association was drafting a working paper on the problems faced by Malay property developers and hoped to present it to Prime Minister Datuk Seri Najib Razak and the relevant authorities for further action.

By Business Times