Friday, December 3, 2010

RCECAP is facing some difficulty

Rcecap currently is facing a some problem. One of the major borrower (KOWAJA) is ceased to borrow money from RCECAP to lend to civil servant due to new guideline set up by Cooperative Commission of Malaysia.

New guildline GP6, issued at latest November, is a set of guidelines governing co-ops’ lending activities. The guidelines also set out three types of business models practised by co-ops in providing credit facilities to members:



1) The co-operative’s credit activities are funded by internal sources and the lending operations are managed by the co-op.


2) The co-operative’s credit activities are funded by financial institutions and the lending operations are managed by the co-op.


3) The co-operative acts as an agent for banks and lending activities are managed by banks.


Under GP6, model 3 is not allowed.


If this is the reason, I do not see RCECAP will face any difficulty to comply with the new rule. However, there is a major concern over the high interest rate apply on the civil servant. But I do not think this should be a concern too, normally for civil servant to borrow high interest money is because there are lack of credit and bank is not willing to lend to them so RCECAP is the only way for them to borrow money in a legal way.

Actually by borrow money from RCE Capital is better for civil servant to borrow money from Ah Long, which might end up to loss their life in the process.

I am still holding at shares without dispose any one of the shares.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.