SHAREDA Seeks State Government's Help to Intervene With Regional Risk Office
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Sabah Housing and Real Estate Development Association (SHAREDA) may ask the State Government to intervene in the event it cannot meet Bank Negara Malaysia's (BNM) request for data to justify a need to set up a Regional Risk Office in the State.
The association has sent out survey forms to members requesting information about loan rejections they had experienced "due to the difference of opinion between commercial banks in Sabah and Kuala Lumpur".
SHAREDA President Mr Chew Sang Hai fears that complete data may not be forthcoming from all its 186 members.
"In the first place, no reasons were given when their loan applications were rejected", he said.
Secondly, members may feel hesitant to disclose the banks they applied for their loan from out of fear of offending them, although data provided will be treated as highly confidential.
"Offending a bank is the last thing anyone in this line of business wants to do", he said.
Despite his pessimism, Chew said he would try his best to encourage members to lend their cooperation.
The survey form asks for details such as the name of the project, amount of loan applied, the name of the bank (if possible name of branch and officer concerned) and reasons for loan rejection.
In the event, the survey exercise fails to meet BNM requirement, SHAREDA would seek Tan Sri Musa Aman's help in his capacity as State Finance Minister.
"Our challenge is that commercial banks in KL refuse to buy our story that Sabah's development needs are different. For instance, we need to build more hotels to cater to our tourism needs. They don't buy this story".
"I may need to go to the CM for assistance. He has good knowledge about Sabah's development needs. I'm sure he is in the best position to present our case to the national bank and other relevant parties".
SHAREDA, he said, has all along insisted that risks and businesses of certain industries in Sabah are different from Peninsula, particularly in the hotel and Cineplex sectors where there is a huge potential for growth.
In Peninsula, these industries have been experiencing a glut.
"From our experience, many of our loan applications were rejected by the Risk Committee in Kuala Lumpur or approval committee despite strong recommendations by their respective managers in Sabah.
"This is because the KL Risk Committee comprises of members who are armchair analysts, whose experiences are mainly based on Peninsula and lack local data and knowledge about Sabah's development", Chew said in his letter circulated t members regarding the survey exercise.
He reiterated that in order to resolve the issue, SHAREDA had approached the national bank to establish a Regional Risk Office in Sabah with an approval authority up to RM150 million and a regional exposure between 5 - 7.5% out of the total loan exposure.
BNM had agreed, in principle, during a recent dialogue with industry stakeholders but advised SHAREDA to gather facts and figures which will then be submitted to headquarters and ABM.
In the letter, Chew appealed for co-operation from members, saying without data the national bank would likely not heed to their plea for Sabah's own Regional Risk Office.