Monday, July 8, 2013

Angkasa in the news for over-lending

ANGKATAN Koperasi Kebangsaan Malaysia Bhd (Angkasa), the apex body for co-operative organisations has been in the news for the wrong reasons in recent years. This is largely due to its lucrative business model say industry observers.

Source from (The Star Online): http://www.thestar.com.my/Business/Business-News/2013/07/06/Angkasa-in-the-news-for-overlending.aspx
Published: July 08, 2013

Angkasa, which has close to 5,000 members, is the sole interface with the Attorney-General’s office that enables automatic salary deductions. Based on labour law the deduction facilities are for cooperative members, which in turn are extended to civil servants as they make up the bulk of its membership.

This is how the business model works. Angkasa takes a fee of 0.95% per month for enabling these deductions and going by the loans disbursement, it has been generating a huge amount of money. Last year, Angkasa had cash and cash equivalents totalling RM313.8mil, its 2012 annual report showed. The body has assets worth RM85.14mil while it made a profit of RM15.65 mil on a revenue of RM98.29mil last year.

A cooperative consultant noted that the lending to civil servants showed a marked rise in the last three to four years. Incidentally in 2009, Royal Professor Ungku Abdul Aziz resigned as president of Angkasa after heading the cooperative movement for 37 years.

There are now more non-cooperative organisations tapping the automatic salary deduction scheme as compared with a few years ago. Last year, 580 non-cooperative members tapped the Angkasa scheme versus 377 members with RM10.13bil being disbursed to almost 3 million clients, Angakasa annual report revealed. – By Gurmeet Kaur

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