Wednesday, September 30, 2009

“BANK RAKYAT TO DISBURSE RM16 BILLION IN PERSONAL LOANS (Bernama via Yahoo! Malaysia News)” plus 4 more

“BANK RAKYAT TO DISBURSE RM16 BILLION IN PERSONAL LOANS (Bernama via Yahoo! Malaysia News)” plus 4 more

BANK RAKYAT TO DISBURSE RM16 BILLION IN PERSONAL LOANS (Bernama via Yahoo! Malaysia News)

Posted: 30 Sep 2009 02:12 AM PDT

KUALA LUMPUR, Sept 30 (Bernama) -- Bank Rakyat expects to disburse RM16 billion in personal loans this year following its "i-Aslah Subscribe and Win Personal Financing" campaign.

To be launched on Oct 1, 2009, the three-month campaign is being held in conjunction with Bank Rakyat's 55th anniversary.

As of Aug 31, 2009, Bank Rakyat gave out RM10.8 billion in personal loans, it said in a statement today.

For its financial year ending Dec 31, 2009, Bank Rakyat expects to give out RM20 billion in personal, car, housing and commercial loans.

-- BERNAMA

PPK VMD



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18. More Bank Rakyat personal loans (The Star)

Posted: 28 Sep 2009 06:44 PM PDT


It expects to disburse RM20bil this year

KUALA LUMPUR: Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) is targeting to disburse about RM20bil in personal loans this year from RM16bil in 2008.

Managing director Datuk Kamaruzaman Che Mat said that as of last month, the amount disbursed was about RM19.5bil.

We have 120 branches nationwide and in some areas a branch can disburse RM20mil to RM30mil a month compared with RM5mil to RM8mil by a smaller branch, he said after officiating the campaign for the banks latest personal financing product, 1Aslah Personal Financing-i, in conjunction with its 55th anniversary yesterday .

On the campaign, Kamaruzaman said that judging from a similar product launched earlier, he expected to disburse about RM4.8bil loans in the next three month s.

The new product, he said, offered a minimum return of 3.25% a year to consumers who took a one to threeyear loan and that return could be higher if held over a longer period.

Turning to non-performing loans, he said they had been reduced to 1.7% from 1.95% at the end of last year.

The banks loan growth in the first six months stood at 13% (for personal financing) and about 20% for the purchase of assets compared with the same period last year.

Kamaruzaman said Bank Rakyat was targeting a pre-tax profit before zakat of RM1.3bil compared with RM1.23bil last year. For the first halfyear, its profit before tax and zakat stood at RM668.5mil, up 29.6% versus the previous corresponding period.

On its plans to increase its RM2bil paid-up capital, he said Bank Rakyat was looking at topping up a further RM500mil next year.



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ARC loans: How they work (CNN Money)

Posted: 30 Sep 2009 08:29 AM PDT

NEW YORK (CNNMoney.com) -- Called "America's Recovery Capital," ARC loans are designed to make up to $35,000 available to struggling small business owners to temporarily help them keep up with payments on existing loans, including credit card debt. Authorized as part of February's stimulus bill, the program will run through Sept. 30, 2010, or until its funding runs out, whichever comes first.

Here's a primer on how the emergency loans work.

Eligibility: Sorry, startups, this isn't for you. ARC loans are only open to businesses that have been in operation for at least two years and have been profitable in at least one of the last two years. (Startup businesses can apply for financing through other SBA programs, including the agency's flagship 7(a) loan program.)

Borrowers can use ARC loans to make payments for up to six months on their existing debt, with no repayment due on the loan for another year. After that, the business has five years to pay back the loan principal. The government covers the interest payments.

Applicants must prove they are experiencing financial hardship, as evidenced by declining sales (a drop of at least 20% over the past year), frozen credit lines, rising business costs (again, 20% or more in the past year), or difficulty meeting payroll, paying rent or making loan payments.

But borrowers also have to be running a "viable" business. The SBA wants to see cash-flow projections for at least the next two years illustrating that the business will be able to repay its ARC loan and other debt obligations. Borrowers must have "acceptable" business credit scores, and they can't be more than 60 days past due on any loan they'd like ARC funds to help cover. Lenders may also require collateral to back up the loan.

Qualifying debt: Because of arcane government rules, ARC loans can't be used to make payments on loans backed by the SBA before Feb. 17, 2009, the date the stimulus bill took effect. However, borrowers can use the loans for relief from virtually any other business debt, including a commercial mortgage or lease, home equity loans used to finance business operations, bank loans made outside the SBA program, notes payable to suppliers, and credit card debt.

That last one is a key feature. Borrowers can use ARC loans to cover payments on their personal credit cards if the money was borrowed for business expenses. "We do recognize the merging of the owners' and businesses' finances," says Eric Zarnikow, the SBA's associate administrator for capital access.

How to apply: The SBA won't make ARC loans directly. As with most of its lending programs, it will instead offer guarantees on loans made by banks. If the business owner defaults, the SBA pays off the debt. (The business owner still takes a hit on their credit report.)

Each bank sets its own procedures and timeline for issuing loans, so business owners looking to apply should contact a participating bank. Each business can receive only one ARC loan, for a maximum of $35,000, but that loan can be used to make payments on more than one debt.

The SBA will began processing applications for the loans on June 15, but individual banks may take longer to draft their own application procedures.

What's in it for banks: ARC loans are a sweet deal for borrowers: They carry no fees, require no payments for at least a year, and have their interest payments fully subsidized by the government.

That, and the fact that they're specifically targeted at businesses in trouble, makes them especially risky. Banks have been wrangling with the SBA for years about underwriting standards for their small business loans: The government can penalize lenders for high default rates in their portfolios, which has made some banks nervous about participating in the ARC loan program. Collecting the government guarantee on a loan gone bad can be onerous, and banks have to absorb the administrative costs of pursuing delinquent loans and liquidating those that default. The SBA says it expects ARC loans to default at a higher rate than its other programs, and will adjust its expectations for lenders accordingly.

Because the loans are fully guaranteed by the government, ARC loans are fairly safe for banks. But the interest rate on them isn't very competitive. The SBA has set the interest rate it will pay for the loans at prime plus 2%. For October, that rate would be 5.25%.

That's a lower interest rate than the SBA sets for its other loan programs. However, unlike ARC loans, those programs don't offer a 100% loan guarantee -- on a traditional SBA loan, if a business defaults, banks would be stuck with some of the loss.

Availability: The SBA estimates that around 10,000 small businesses will receive ARC loans, but it's uncertain how quickly the loans will be dispersed.

"It's a little challenging to anticipate what the demand will be," Zarnikow says. "There will be ramp-up time as lenders train operators."

In the Recovery Act, Congress allocated $255 million to support the ARC loan program. That money covers only the program's subsidies, for interest payments and defaults, allowing the money to stretch to support a larger dollar-volume of lending. Each lender will be limited to 50 loans per week. If a bank makes less than 50 loans, they can carry the unused allocation over to other weeks, but lenders will be capped at a maximum of 1,000 loans through the program's duration. To top of page

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Small business ARC loans: How they work (CNNMoney.com via Yahoo! Finance)

Posted: 30 Sep 2009 08:23 AM PDT

Called "America's Recovery Capital," ARC loans are designed to make up to $35,000 available to struggling small business owners to temporarily help them keep up with payments on existing loans, including credit card debt. Authorized as part of February's stimulus bill, the program will run through Sept. 30, 2010, or until its funding runs out, whichever comes first.

Here's a primer on how the emergency loans work.

Eligibility: Sorry, startups, this isn't for you. ARC loans are only open to businesses that have been in operation for at least two years and have been profitable in at least one of the last two years. (Startup businesses can apply for financing through other SBA programs, including the agency's flagship 7(a) loan program.)

Borrowers can use ARC loans to make payments for up to six months on their existing debt, with no repayment due on the loan for another year. After that, the business has five years to pay back the loan principal. The government covers the interest payments.

Applicants must prove they are experiencing financial hardship, as evidenced by declining sales (a drop of at least 20% over the past year), frozen credit lines, rising business costs (again, 20% or more in the past year), or difficulty meeting payroll, paying rent or making loan payments.

But borrowers also have to be running a "viable" business. The SBA wants to see cash-flow projections for at least the next two years illustrating that the business will be able to repay its ARC loan and other debt obligations. Borrowers must have "acceptable" business credit scores, and they can't be more than 60 days past due on any loan they'd like ARC funds to help cover. Lenders may also require collateral to back up the loan.

Qualifying debt: Because of arcane government rules, ARC loans can't be used to make payments on loans backed by the SBA before Feb. 17, 2009, the date the stimulus bill took effect. However, borrowers can use the loans for relief from virtually any other business debt, including a commercial mortgage or lease, home equity loans used to finance business operations, bank loans made outside the SBA program, notes payable to suppliers, and credit card debt.

That last one is a key feature. Borrowers can use ARC loans to cover payments on their personal credit cards if the money was borrowed for business expenses. "We do recognize the merging of the owners' and businesses' finances," says Eric Zarnikow, the SBA's associate administrator for capital access.

How to apply: The SBA won't make ARC loans directly. As with most of its lending programs, it will instead offer guarantees on loans made by banks. If the business owner defaults, the SBA pays off the debt. (The business owner still takes a hit on their credit report.)

Each bank sets its own procedures and timeline for issuing loans, so business owners looking to apply should contact a participating bank. Each business can receive only one ARC loan, for a maximum of $35,000, but that loan can be used to make payments on more than one debt.

The SBA will began processing applications for the loans on June 15, but individual banks may take longer to draft their own application procedures.

What's in it for banks: ARC loans are a sweet deal for borrowers: They carry no fees, require no payments for at least a year, and have their interest payments fully subsidized by the government.

That, and the fact that they're specifically targeted at businesses in trouble, makes them especially risky. Banks have been wrangling with the SBA for years about underwriting standards for their small business loans: The government can penalize lenders for high default rates in their portfolios, which has made some banks nervous about participating in the ARC loan program. Collecting the government guarantee on a loan gone bad can be onerous, and banks have to absorb the administrative costs of pursuing delinquent loans and liquidating those that default. The SBA says it expects ARC loans to default at a higher rate than its other programs, and will adjust its expectations for lenders accordingly.

Because the loans are fully guaranteed by the government, ARC loans are fairly safe for banks. But the interest rate on them isn't very competitive. The SBA has set the interest rate it will pay for the loans at prime plus 2%. For October, that rate would be 5.25%.

That's a lower interest rate than the SBA sets for its other loan programs. However, unlike ARC loans, those programs don't offer a 100% loan guarantee -- on a traditional SBA loan, if a business defaults, banks would be stuck with some of the loss.

Availability: The SBA estimates that around 10,000 small businesses will receive ARC loans, but it's uncertain how quickly the loans will be dispersed.

"It's a little challenging to anticipate what the demand will be," Zarnikow says. "There will be ramp-up time as lenders train operators."

In the Recovery Act, Congress allocated $255 million to support the ARC loan program. That money covers only the program's subsidies, for interest payments and defaults, allowing the money to stretch to support a larger dollar-volume of lending. Each lender will be limited to 50 loans per week. If a bank makes less than 50 loans, they can carry the unused allocation over to other weeks, but lenders will be capped at a maximum of 1,000 loans through the program's duration.



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Cao criticizes FEMA delay in forgiving disaster loans (New Orleans Times-Picayune)

Posted: 30 Sep 2009 04:12 AM PDT

By Bruce Alpert, Times-Picayune

September 30, 2009, 6:00AM

The Federal Emergency Management Agency received praise Tuesday for unclogging some long overdue disaster assistance, but Rep. Anh "Joseph" Cao, R-New Orleans, said there still is an "inexplicable delay" in forgiving tens of millions of dollars in disaster loans.

anh_cao.JPGBill Haber/The Associated Press archiveRep. Anh 'Joseph' Cao says loans should be forgiven if government entities lack the revenue to meet their operating budgets.

Cao said that by federal statute, FEMA should forgive the loans if three fiscal years after a disaster strikes local governments still are in such dire financial condition that local revenue is insufficient to meet their operating budgets.

It's been four years since Hurricane Katrina struck, and New Orleans clearly lacks the resources to repay the disaster loans, Cao said at a hearing by the House Subcommittee on Economic Development, Public Buildings and Emergency Management.

David Garratt, FEMA's acting deputy administrator, told Cao every government entity that meets the federal criteria will have its loans forgiven and he promised the congressman and panel Chairwoman Eleanor Holmes Norton, D-D.C., an update soon.

Cao expressed concern about reports FEMA is cutting staff at the Louisiana Transitional Recovery Office in New Orleans. But Charles Axton, another FEMA official who testified at the hearing, said cutbacks do not involve staff working on reducing the backlog of Hurricane Katrina related claims.

During the hearing, Paul Rainwater, executive director of the Louisiana Recovery Authority, joined Cao in praising the new management team installed by the Obama administration for obligating more than $1 billion in hurricane recovery financing, much of which had been stalled for years.

"I want to give credit where credit is due, " said Rainwater, praising a new "cooperative" attitude that has FEMA working directly with the state of Louisiana and local governments to move stalled rebuilding projects.

Craig Taffaro Jr., president of St. Bernard Parish, concurred, but said that projects in his parish are being slowed because FEMA doesn't have enough personnel to prepare the detailed work orders required for projects, even after they are approved by FEMA officials.

He also complained that FEMA sometimes delays projects by insisting on hiring its own engineers and architects to review work done by state and local engineers and architects, a process he called costly and time-consuming.

Norton said it would seem that this "extra layer" of bureaucracy can be stripped from the process, expressing frustration that despite progress there are still delays in pushing funding through the bureaucracy. It just adds to the misery of residents still waiting for their own personal signs of recovery, Norton said.

"I don't know whether to cry now or after the hearing, " she said.

. . . . . . .

Bruce Alpert can be reached at balpert@timespicayune.com or 202.383.7861.



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Posted by Rakhma at 6:33 PM

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