Tekun targets young professionals next year

KUALA LUMPUR: The National Entrepreneur Group Economic Fund (Tekun Nasional), which saw its funds allocation more than doubled in Budget 2015, aims to widen its reach and will start providing financing to young professionals next year, said its managing director and CEO Datuk Abdul Rahim Hassan (pix).
"Next year we also want to cater for the young professionals. For example, young engineers, architects, lawyers who are going to set up their business firm," he told SunBiz at the sidelines of the 10th International CEO Forum yesterday.
"They have to have some funds, some capital. Currently they go to the banks but they don't have any track record. Let's say you have worked in a legal firm for quite some time and you want to open your own practice, so you go to the bank, to borrow funds to set up office. Definitely the bank won't give. So we have to create this kind of programme for these people," he added.
Abdul Rahim said Tekun Nasional is open to young professionals from all industries and the move is to encourage more young professionals to become entrepreneurs.
"We want to make Malaysia a developed nation by 2020 and we are talking about a high income nation. Definitely we have to generate it through entrepreneurship. That's why we have to encourage young people to go into business. It's not easy but we have to do it," he said.
Abdul Rahim said the government has been very supportive of entrepreneurs and has allocated RM500 million to Tekun Nasional for disbursement next year, as announced in Budget 2015.
"Of the RM500 million, RM300 million is fresh funds and RM200 million is internal funds. The RM200 million we are supposed to pay back to the government but instead of that, we plough back into the system," he said.
Abdul Rahim said it received RM150 million fresh funds from the government this year. So far this year, Tekun Nasional has disbursed some RM300 million, less than the target of RM550 million announced earlier this year.
"This year, the disbursement is less than last year. This year is about RM300 million. This is up to the people applying. So, maybe some of them can generate their own funds that's why they don't have to borrow," he said, adding that some borrowers also have other sources of funding.
According to earlier reports, the agency disbursed RM535 million last year and RM508 million in 2012.
Abdul Rahim said the repayment rate is currently "manageable" at 70%. The agency has over 300,000 borrowers and aims to finance another 30,000 to 40,000 borrowers by the end of the year.
The agency has also been tasked to help finance armed forces veteran entrepreneurs starting next year.
"This is another group that the government wants us to help. Those who retired from the army, we give them the funding and they can start up their own business. These are the programmes announced in the Budget," he said.