Attitude of MARA borrower towards loan repayment / Norsuhana Azielya Derasek

According to Dr. Norhasni Zainal Abiddin, in view to the increasing number of entrepreneurs and students being offered for places in higher learning business and institutions, the government had taken an initiative to provide loans for most of the entrepreneurs and students. The main body that providing such facilities to the entrepreneurs and student in Malaysia is the government agencies. They are the major resources for the entrepreneurs and students to obtain business and study loans for their flexibility in applying and repaying it as well as low interest rate or interest free. While banks and other loan providers incurred higher interest rates and had very tight conditions for obtaining them. This government agency of business and educational loan provider had required for the entrepreneurs and students to report themselves to the agency soon after they completed their business and study and re-pay the loan at fixed amount one year. Based on the latest information of student’s study status, the agency will prepare the Repayment Schedule which among other things consists of loan amount, loan period and the monthly repayment which need to be made by the students. As for students who graduated from overseas universities, the monthly repayment is much higher as compared to local university students due to larger loan size provided to those students. Normally, the repayment amount is computer generated figures however the agency would take into account the level and type of employment of the borrowers and the size of their salary. Notwithstanding, there are some cases where the borrower given less attention to the letter or warning sent to them that demanding them to pay back the loan. On some occasions, the letter sent to them will be returned to the agency for undelivered mails due to recipient not exist at that address. In other cases, some of the borrowers had started paying back the loans but stop doing it half way or inconsistence in their repayment even though reminders had to be sent to them and to the extent to issue them with Notice of Demand from lawyer. The Notice of Demand requested the borrowers to act within 14 days and failing to do so will be bound for further legal suit such as being summoned to the
court. If the borrowers still failed to settle the loan, the guarantors will also be responsible to pay back the loan. This is because before the loan been disbursed to the borrower, the borrower and the guarantors had to sign an agreement with the agency. All parties understand their responsibilities and a copy of the agreement were sent to the respective parties. Generally, this research was done in order to understand the problems of loan repayment at one of the major government agency which providing the educational loan. The main objectives in this research are what are the approaches and actions applied by the agency in recovering the loan. Then, what are the problems that caused the borrowers unable to pay or delay their repayment and what are the backgrounds of the problem borrowers.